KPPIP Report · PDF file15. PLTMH Lodoyo (10MW) 16. Balikpapan – Samarinda Toll Road 17....

KPPIP ReportPeriod of January - June 2017

IKPPIP’s ReportJanuary - June 2017

CHAPTER 1: Progress of the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)

This chapter covers the highlights of KPPIP’s progress as an institution which includes:

A. Introduction to Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)B. Development of KPPIP’s Project Management Office (PMO)C. KPPIP’s Support for Policy on Acceleration of Infrastructure DeliveryD. Progress of Prioritization of Priority Projects

CHAPTER 2: Progress of Infrastructure Development in Indonesia

This chapter highlights progress related to regulations, fiscal, and institutional contexts.

A. Achievements in Infrastructure Development

B. Positive Impact of Infrastructure Delivery on Indonesia’s Economic Development • Correlation between Infrastructure Development and Economic Growth in Semester I of 2017 • Private Sector’s Increasing Interest in Investment

C. Improvements in Regulations concerning Infrastructure • Economic Policy Package • Presidential Regulation No. 14 of 2017 on Acceleration of Electricity Infrastructure Development

D. Improvements in Regulations concerning Institutions • Expansion of the Scope of Duty and Function of Public Service Agency of Indonesia Toll Road Authority (BLU BPJT)

E. Support for Alternative Funding• Progress of PPP in Indonesia• Progress of the Implementation of Non-Government Budget Infrastructure Funding (PINA)• Progress in Drawing up the Concept of Limited Concession Scheme (LCS)

CHAPTER 3: KPPIP’s Achievements

This chapter covers reports on KPPIP’s Achievements in the projects in terms of quality improvements in project preparation, determination of funding scheme, monitoring and debottlenecking as well as improvements in regulations.

A. Support for Project Preparation • Outline Business Case of Bitung International Hub Port (PHI)

• Masterplan of Patimban Port Intermoda

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B. Determination of Project Funding Scheme

• Jakarta, Bogor, Depok and Bekasi LRT (Light Rail Transit)• West Semarang SPAM (Drinking Water Supply System)• Kuala Tanjung International Hub Port • Financial Close of Palapa Ring Broadband East Package

C. Monitoring and Debottlenecking of Project • Issuance of Environmental Permit for Patimban Port• Issuance of Regulation of the Governor of DKI Jakarta No. 53 of the Year 2017 on the

Assignment of PT MRTJ in the Operation of Facility and Infrastructure for MRT• Issuance of Recommendation Letter concerning Conformity ofCilacap RDMP with the Spatial

Plan• Settlement of Land Procurement for Central-West Java Transmission Line • Completion of Indication Study on Funding Scheme for Jakarta Sewerage System • Service Level Agreement (SLA) on Three Additional Sections of Trans Sumatera Toll Road

D. Achievements in Improving Regulations concerning Infrastructure• Government Regulation No. 13 of the Year2017 on National Spatial Planning • Government Regulation No. 6 of the Year 2017 on Railway Operation

CHAPTER 4: List of KPPIP’s Priority Projects

List of 30 Priority Projects 1. West Semarang Drinking Water Supply System (SPAM) 2. Jakarta Sewarage System3. National Capital Integrated Coastal Development (NCID) Phase A4. Bontang Oil Refinery5. Tuban Oil Refinery6. Refinery Road Map Plan (RDMP)7. High Voltage Direct Current (HVDC)8. Sumatera 500kV Transmission Line9. Central – West Java 500 kV Transmission Line10. Central Java Power Plant (PLTU Batang)11. PLTU Indramayu12. A. Sumsel 8 Mine Mouth Power Plant B. Sumsel 9, 10 Mine Mouth Power Plant13. PLTA Karangkates IV & V (2x50 MW)14. PLTA Kesamben (37 MW)15. PLTMH Lodoyo (10MW)16. Balikpapan – Samarinda Toll Road17. Manado – Bitung Toll Road18. Serang – Panimbang Toll Road19. A. Medan – Binjai Toll Road (8 Sections of Trans Sumatera) B. Palembang – Indralaya Toll Road (8 Sections of Trans Sumatera) C. Bakauheni – Terbanggi Besar Toll Road (8 Sections of Trans Sumatera) D. Pekanbaru – Dumai Toll Road (8 Sections of Trans Sumatera) E & F. Terbanggi Besar – Pematang Panggang – Kayu Agung Toll Road (8 Sections of

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Trans Sumatera) G. Palembang – Tanjung Api-Api Toll Road (8 Sections of Trans Sumatera) H. Kisaran – Tebing Tinggi Toll Road (8 Sections of Trans Sumatera)20. North-South Corridor of Mass Rapid Transit Jakarta 21. Soekarno – Hatta Express Railway22. Makassar – Parepare Railway23. Kalimantan Timur Railway24. South Sumatera Light Rail Transit 25. Jakarta, Bogor, Depok, and Bekasi Light Rail Transit 26. Kuala Tanjung International Hub Port27. Bitung International Hub Port28. Patimban Port29. Inland Waterways /Cikarang – Bekasi – Sea30. Palapa Ring Broadband

CHAPTER 5: National Strategic Projects (PSN)

Elucidation of Presidential Regulation No. 3 of the Year 2016 in conjunctin with Presidential Regulation No. 58 of the Year 2017 on National Strategic Projects and roles of KPPIP in promoting PSN. In addition, this chapter also covers KPPIP’s activities in its evaluation of PSN and LATEST UPDATES.A. Evaluation and Selection of National Strategic Proejcts B. Current Status of National Strategic Projects (PSN)C. KPPIP’s Information Technology (IT) System

CHAPTER 6: Policies on Infrastructure Supported by KPPIP

This chapter describes the existing laws and regulations that are identified to be adjusted to policies on the acceleration of infrastructure, including priority projects and national strategic projrects. This chapter also elucidates the direction of infrastructure policy under the mandate of the President.

A. Amendments to Regulations that Have Made Progress in Infrastructure Delivery A1. Amendments to Regulations on Intersectoral concerning Infrastructure Delivery

• Amendments to Government Regulation on National Spatial Plan• Amendment to Presidential Regulation on Acceleration of Priority Infrastructure Delivery • Amendment to Presidential Regulation on Acceleration in the Implementation of National

Strategic Projects (PSN)• Presidential Regulation on Management of Social Impact in Land Proccurement for PSN

A2. Amendments to Sectoral Regulations • Amendment to Government Regulations on Railway Operation • Amendment to Presidential Regulation on Acceleration of Light Rapit Transit (LRT)

Operation in Jakarta, Bogor, Depok and Bekasi• Regulation of the Minister of Transportation on the Revocation of the Requirements for

Business Entity’s Equity in the Operation of Sea Transport, Shipping Agency, Loading and Unloading Operation and Port Business Entity

• Amendment to Presidential Regulation on Acceleration in the Development of Electricity Infrastructure

• Amendment to Government Regulation on Refundable Operational Costs and

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Treatment of Income Tax in Upstream Oil and Gas BusinessA3. Amendments to Regulations concerning Infrastructure Funding • Regulation of the Minister of Finance on the Procedure for Land Procurement for National

Strategic Projects (PSN) by State Asset Management Agency (LMAN)• Regulation of the Ministry of Finance on the Procedure for Providing Central

Government’s Guarantee for the Acceleration of National Priority Projects (PSN)

B. Amendments to Regulations Required to Accelerate Infrastructure Delivery B1. Amendments to Cross Sectoral Regulations on Infrastructure Delivery such as Land

Procurement, License Issuance, and others• Amendment to Presidential Regulation on Acceleration the Implementation of National

Strategic Projects (PSN)

B2. Amendments to Sectoral Regulations on Infrastructure Delivery • Coordination of Amendments to Presidential Regulations on the Development and

Expansion of Domestic Oil Refineries • Promoting Amendments to Regulations of the Governor of DKI Jakarta concerning the

Development of Jakarta MRT• Government Regulations on the Provision of Fiscal Incentives to Oil and Gas Downstream

Business Activities

B3. Coordination of Issuance of OJK’s Regulations in Infrastructure Fund Investment in the Form of Collective Investment Contract

CHAPTER 7: KPPIP’s Future Plans

A. KPPIP’s Achievements B. KPPIP’s Plans in 2017C. KPPIP’s Activities in Human Capital and Capacity Development Overview of Human Resource on National Priority and Strategic Projects: • Problems and Engineering Solutions • Capacity Development Activity as a Support for the Implementation of Priority and

National Strategic Projects

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ABET Accreditation Board for Engineering and TechnologyAD ART BylawsAMDAL Environmental Impact AssessmentANDAL Environmental Impact AnalysisAP Availability PaymentAPBD Regional Budget APBN State BudgetASEAN Association of South East Asian NationBappeda Regional Development Planning AgencyBappenas National Development Planning AgencyBED Basic Engineering DesignBK Board of ChapterBOD Biological Oxygen DemandBPSN Badan Nasional Sertifikasi ProfesiBPJT Indonesia Toll Road AuthorityBPN National Land AgencyBP3TI House of Rural Telecommunication and Information Technology BUJT Toll Road Business EntityBKPM The Investment Coordinating BoardBLU Public Services agencyBUMD Regional Government-Owned EnterpiseBUMN State-Owned EnterpiseB2B Business to BusinessCJPP Central Java Power PlantDED Detail Engineering DesignDNI Daftar Negatif InvestasiEBITDA Earnings Before Interest, Taxes, Depreciation and AmortizationEPC Engineering Procurement and ConstructionFAIP Proffesional Engineer Application Forms FBC Final Business CaseFEED Front End Engineering DesignFS Feasibility StudyGRR Grass Root RefineryG2G Government to GovernmentHA HectareHSBC Hong Kong Shanghai Banking CorporationHKK Himpunan Keahlian KeinsinyuranHVDC High Voltage Direct CurrentIFC International Finance CorporationIDR Indonesian Rupiah

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IP Professional EngineerIPAL Waste Water Management PlantIPP Independent Power ProducerIPP Insinyur Profesional PratamaIPPKH Borrow-to-use Permti for Forest AreaIPM Para-Professional EngineerIPU Professional EngineerISRM Indonesia Single Risk ManagementJABEE Japan Accreditation Board for Engineering EducationJICA Japan International Corporation AgencyJKINFA Infrastructure Index ValueJSS Jakarta Sewerage SystemKA ANDAL Terms of Reference on Environmental Impact AnalysisKAK Terms of ReferenceKEK Special Economic ZoneK/L Ministries/Government AgenciesKLHS Strategic Environmental AssessmentKementerian ATR Ministry of Agrarian Affairs and Spatial Planning Kementerian ESDM Ministry of Energy and Mineral Resources Kementerian LHK Ministry of Environment and Forestry Kementerian PAN Ministry of Administrative and Bureaucratic Reform Kementerian PPN Ministry of National Development Planning Kementerian PUPR Ministry of Public Works and Public HousingKementerian RISTEKDIKTI

Ministry of Research, Technology, and Higher Education

KPBU Public-Private Partnership KPI Key Performance IndicatorKPPIP Committee for Acceleration of Priority Infrastructure Delivery KPPIP-SF Committee for Acceleration of Priority Infrastructure Delivery for Priority-Support

Facility KSP Executive Office of the PresidentKUR Credits for Micro, Small and Medium BusinesseskV Kilo-voltLCS Limited Concession SchemeLMAN State Asset Management Agency (LMAN)LKPP National Public Procurement AgencyLPJK Construction Service Development BoardLRT Light Rail TransitLSIP Lokakarya Sertifikasi Insinyur ProfesionalLSP Lembaga Sertifikasi ProfesiMBR Low Income CommunityMenteri ATR Minister of Agrarian Affairs and Spatial PlanningMoU Memorandum of Understanding

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MRTJ Mass Rapid Transportation JakartaMW MegawattNCICD National Capital Integrated Coastal DevelopmentOBC Outline Business Case ODA Official Development AssistanceOJK Indonesia Financial Services AuthorityPBAS Performance Based Annuity SchemePDAM Regional Drinking Water CompanyPDB Gross Domestic ProductPDF Project Development FundPINA Non-Government Budget Infrastructure Financing Permenhub Regulation of the Minister of TransportationPermenko Regulation of the Coordinating MinisterPerpres Presidential RegulationPJBL Power Purchase AgreementPJP Implementing AgencyPJPK Government Contracting AgencyPLTA Hydroelectric Power Plant PLTMH Micro-hydroelectric Power PlantPLTU Coal-Fired Power PlantPMO Project Management OfficePM Regulation of the MinisterPMK Regulation of the Minister of FinancePMN State Capital InjectionPP Government RegulationPPA Power Purchase AgreementPPI Engineer Professional ProgramPPJT Toll Road Concession AgreementPPN Value Added Tax Pre-FS Pre-Feasibility StudyPSO Public Service ObligationPT HBAP PT Huadian Bukit Asam PowerPT IIF PT Indonesia Infrastructure FinancePT KAB PT Kereta Api BorneoPT KAI PT Kereta Api IndonesiaPT MRTJ PT Mass Rapid Transit JakartaPT PII PT Penjaminan Infrastruktur Indonesia/Indonesia Infrastructure Guarantee Fund) PTPIN Pengembangan Terpadu Pesisir Ibukota NegaraPT PLN PT Perusahaan Listrik Negara/State Electricity CompanyPT SMI PT Sarana Multi InfrastrukturPSN National Strategic ProjectRDMP Refinery Development Master Plan/Revitalization of Existing Oil RefineryRI The Republic of IndonesiaROW Right of Way

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RPJMN National Medium-Term Development Plan RPL Recognition of Learning/Prior Experiences RRT People’s Republic of ChinaRTRW Regional Spatial PlanRUPTL Ten-Year Electricity Infrastructure Development PlanRPL Recognition of Prior Learning SBOT Supported-Build-Operate-TransferSDM Human CapitalSHIA Soekarno-Hatta International AiportSK Decision LetterSKA Qualified CertificationsSKKNI Standar Kompetensi Kerja Nasional IndonesiaSKT Sertifikat Ketrampilan KerjaSLA Service Level AgreementSOP Standard Operating ProceduresSPAM Drinking Water Supply SystemSPC Special Purpose CompanySPV Special Purpose VehicleS&P Standard and Poor’sTA Transaction AdvisoryTA Expert TI Information TechnologyTKDN Local ContentsUU LawUMKM Micro, Small, Medium Businesses, and Cooperatives, USD United States DollarVfM Value for MoneyVGF Viability Gap Funding/ Dukungan KelayakanWA Washington AccordWTE Water-to-Energy

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In the first semester of 2017, the Indonesian Government carried on its continuous endeavours to accelerate infrastructure delivery by focusing on the implementation of policies and guidance set in the previous semester. The acceleration efforts include the issuance of implementing regulations required and the efforts to accelerate settlement of problems/obstacles in the field.

In carrying out its mandate in Presidential Regulation No. 75 of the Year 2014 in conjunction with Presidential Regulation No. 122 of the Year2016, the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) has prepared a list of priority infrastructure using the list of National Strategic Projects (PSN). Selection of priority infrastructure is made by applying four principles used as the basis for preparing the criteria to select priority projects, which include: (1) conformity of 13 sectors with Article 6 of Presidential Regulation No. 122 of the Year 2016, (2) advantage in terms of economic or financial benefits among the projects in each sector, (3) projects requiring supports from KPPIP in their implementation (4) ability to improve participation of private sector (quick wins). After going through a selection process and evaluation of implementation of the existing priority projects, the number of priority projects in the list was increased from 30 to 37 projects. The determination of priority project list will be done by means of revision to Regulation of the Coordinating Minister for Economic Affairs No. 12 of the Year 2015 on Acceleration of Priority Infrastructure Delivery.

In its effort to accelerate priority infrastructure delivery, KPPIP has supported the Implementing Agency by providing facilities, coordination and debottlenecking of infrastructure projects. In 2017, KPPIP draws up a study on Outline Business Case (OBC) for Bitung International Hub Port and Masterplan of Patimban Port Intermode. By conducting both studies, the related stakeholders can now make decisions based on objective results of the study. Therefore, KPPIP has accelerated preparation of the projects, and thus the projects could continue to the next stage, so that the next stage and targets of project implementation can be reached.

In addition to the above, KPPIP has successfully promoted various achievements such as the issuance of Environmental Permit for Patimban Port, issuance of Regulation of the Governor of DKI Jakarta No. 53 of the Year 2017 on the Assignment of PT MRT Jakarta to Operate MRT Infrastructure and Facilities, issuance of the Recommendation Letter about Conformity of cilacap RDMP with the Spatial Plan, completion of land procurement for Central-West Java Transmission Line, completion of the Study on Indicated Funding Scheme for Sewerage System and drawing up of Service Level Agreement (SLA) for the three additional lanes for Trans Sumatera Toll Road.

Further, KPPIP also supports the efforts to accelerate infrastructure by means of policies and institutions. From the policy point of view, Government Regulation No. 13 of the Year 2017 on the National Spatial Plan (RTRWN) and Government Regulation No. 6 of the Year 2017 on Railway Operation have been

Foreword

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issued. In terms of institutions, KPPIP supports the addition of duties and functions of Indonesia Toll Road Authority as a Public Service Agency (BLU BJPT). This development is required to enable the BLU BPJT to undertake its functions in managing the Government’s investment related to the development of toll roads, particularly for the projects that are not commercially feasible. For this extension of tasks and duties, the BLU BPJT will become capable of managing income generated from the operation of toll roads, so that the funds can be managed to provide Government’s support for the smooth implementation of PPP funding scheme by means of availability payment in toll road sector.

In addition, KPPIP also coordinates and facilitates the evaluation of PSN. Between January and March 2017, KPPIP had held a series of coordination meetings at Echelon 1 and Ministerial levels as the Implementing Agencies for the National Strategic Projects (PSN) to evaluate the implementation of PSN throughout the year 2016 and to discuss proposals concerning new PSN from the relevant technical ministries. The result is that the list of PSN contained in the attachment to the Presidential Regulation No.3 of the Year 2016 on Acceleration of the Implementation of National Strategic Projects is revised, so tht the number of projects increases from 225 projects + 1 program (electricity) to 245 projects + 2 programs (electricity and aviation). Other than the revision to the project lists, KPPIP is also involved in drawing up the Presidential Regulation No. 58 of the Year 2017 which governs additional facilities for the implementation of National Strategic Projects (PSN), which among others, organizes the implementation of Non-Government Budget Infrastructure Funding (PINA), settles the issues related to spatial arrangement by the issuance of the discretion of the Minister of Agrarian Affairs and Spatial Planning, prioritizes the use of domestic components and KPPIP’s Information Technology system to monitor the implementation of PSN. Besides that, KPPIP also monitors the implementation of PSN periodically by inventorying data and updating information about the projects. By using the data and information collected, KPPIP can propose settlement of issues concerning the implementation of PSN to be used as the basis for decision making in Closed Meetings on National Stretegic Projects (Rapat Terbatas PSN) chaired by the President.

By the issuance of this Report, we expect that all parties could coordinate each other and utilize improvements in terms of policies and institutions effectively in conducting debottlenecking and efforts to accelerate the delivery of the other projects. Therefore, it is expected that infrastructure projects be realized immediately and bring positive impacts in improving public welfare and the economy both regionally and nationally.

Head of KPPIP’sImplementation Team

Wahyu Utomo

Progress of the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)

CHAPTER I

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In order to support delivery of infrastructure which is believed to create positive impacts that improve the socio-economic status of the nation, the Indonesian Government issued the Presidential Regulation No. 75 of the Year 2014 on Acceleration of Priority Infrastructure Delivery, governing the formation of the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) to improve the quality of the projects delivered and coordinate acceleration efforts required in order to immediately meet the target of infrastructure delivery.

Further, KPPIP issued the Regulation of the Coordinating Minister for Economic Affairs No. 12 of the Year 2015, governing 30 priority projects from various sectors including water and sanitation, toll roads, port, railway, energy, and electricity.

Since its effective operation from August 2015, KPPIP has been actively performing its mandate provided under the Presidential Regulation No. 75 of the Year 2014 by providing inputs related to the policy on infrastructure, giving recommendation to determine the optimum funding scheme, facilitating coordination among stakeholders in debottlenecking, and providing facilities for project preparation such as in drawing up Outline Business Case (OBC) and Envieronmental Impact Assessment (AMDA).

Introduction Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)

A.


KPPIP’S MANDATE

Determination of Priority Project List

Determination of scheme & source of funding for projects determined as priorities

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Mandate under Perpres No. 75 of 2014 jo.Presidential Regulation No.122 of 2016.

Top Down Projects(proposed by the President/Vice President)

Determining quality standardsfor Pre-Feasibility Study/Outline

Business Case (OBC) and conductingrevisions/re-do if necessary (3-6 months )

Bottom Up Projects(proposed by K/L/Pemda)

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State Budget

Action Plans with targetachievement as well asincentives and disincentives

Binding Service LevelAgreement (SLA)

List of Priority Projectsapproved by all parties

Assignment of SOE Coordination between the

Implementing Agency (PJP)and the Ministry of NationalDevelopment Planning (PPN)concerning source of fund (APBN,APBD, Official DevelopmentAssistance (ODA), etc)

Aimed at accelerating theimplementation and utilization

of SOE’s financial capacity

PPP’sPPP Unit at the Ministry ofFinance will coordinate thedrawing up of Final BusinessCases (FBC) and transactionadvisory for the implementationof PPP projects (by involvinginternationally-recognizedconsultants)

Screening and Selection of National Strategic Projects

Carry out monitoring activities for National Strategic Projects, as well asconduct high level debottlenecking strategies for Priority Projects

Preparing action plansand monitoring as well as

implementingdebottleneckingstrategy for Priority Projects

Mapping strategy and policyon the infrastructure sector

Facilitating the improvementof official and institutionalcapacity related to priority

infrastructure delivery


In line with the developments of policies, the Government’s strategy, and issuance of regulations concerning infrastructure, after observing problems arising in the field, KPPIP is encouraged by the issuance of the Presidential Regulation No. 122 of the Year 2016.

By the additional provisions and amendment to Presidential Regulation No. 122 of the Year 2016 it is expected that KPPIP become more effective in performing its duties to accelerate priority infrastructure delivery.

Scope of Amendment to Presidential Regulation No. 122 of the Year 2016

Members Addition of the Coordinating Minister of Maritime Affairs as a Vice Chairman and the Minister of Environment and Forestry as a member.

Type of Infrastructure

Additional types of infrastructure which may be prioritized:• Infrastructure for educational facilities• Area-based Infrastructure• Infrastructure for Tourism • Health care

Procurement

Additional regulations on procurement of Government’s goods and services by KPPIP to allow more effective performance of its duties:• Direct procurement of consulting services or other services amounting to Rp 500

million at a maximum• Direct appointment of international financial institution for the purpose of preparation• Direct assignment of consulting services or other services that have successfully

performed similar contracts• One-time direct appointment to goods supplier who has provided a similar service for

KPPIP with good performance• Performance of multi-year contracts if the work is not completed within 1 budgetary

year due to force majeur• Performance of multi-year contracts if the work is not completed within 1 budgetary

year due to failure on the Ministry/Institution’s part.

Panel of Consultants

Additional regulations on the procedure for the performance of Panel of Consultants to shorten the procurement time. Through the Panel of Consultants, KPPIP will conduct pre-qualification and preliminary selection and award a 3-year umbrella contract to Consultants passing the selection. Consultants in the Panel may be appointed if required.

PMO of KPPIP is formed to work as an ancillary unit for the Implementation Team and KPPIP in making the best decision concerning policy and debottlenecking to accelerate priority infrastructure.It is comprised of professional experts experienced in their respective fields. PMO KPPIP has the capacity to conduct study and analysis required to draw up alternative policies or recommendations on debottlenecking. The recommendations will be proposed to the Implementation Team and Ministerial level for decision making.

As KPPIP’s “kitchen”, PMO can formulate recommendations on policy and regulations, design

Development of KPPIP’s Project Management Office (PMO)B.


strategies to develop the capacity of parties related to infrastructure delivery, monitor the progress of the project, and conduct analysis for prioritization. In order to support both its strategic work and its daily work, PMO of KPPIP is also supported by a team of consultants in several aspects such as implementation, legal issues, communication, and Information Technology (IT).

In order to support KPPIP in monitoring National Strategic Projects and Priority Projects, PMO of KPPIP also plays a role in the managament of Information Technology system developed by KPPIP to monitor and report on the progress of the project to the Minister and the President.

Since 2016, KPPIP has developed Information Technology (IT) system expected to centralize project monitoring at the level of President, Vice President, the Ministry, the Government, and Institution concerning infrastructure project delivery. By the “one-way” IT system. reporting on projects will become more efficient and effective for decision making process.

ORGANIZATIONAL STRUCTURE

The Coordinating Ministry of Maritime Affairs

The Coordinating Ministry of Economic Affairs

Program DirectorSecretary of KPPIP’sImplementation Team

Project Manager-Administration

SeniorProcurement

Expert

ProjectDirector of Human

Resources & CapacityDevelopment

Director ofFinancial

Directorof Energy

& Electricity Sector

Directorof Water and

Sanitation Sector

Directorof Transportation

Sector

Directorof Roads

& Bridges Sector

ProcurementExpert

CapacityDevelopment

Expert

CommunicationsExpert

ExecutiveSecretary

Supporting Consultants for PMO

Panel of Consultants for KPPIP

KPPIP’s Implementation Team

OfficeManager


In Semester I of 2017, PMO of KPPIP introduced the IT system gradually and regularly to the Implementing Agency (PJP) which will be the key point in inputting and updating data. In addition to the introduction, PMO of KPPIP together with the Executive Office of the President (KSP) also provides assistance for the Minsitries/Government Agencies in order to make the new IT system adapting with the existing IT system in the respective institution.

In supporting the acceleration of infrastructure delivery, debottlenecking by KPPIP is conducted comprehensively to deal with obstacles in terms of policy and regulations, project funding and source of funding schemes, and project implementation technicalities. Throughout Semester 1 of 2017, KPPIP has made a contribution by responding and providing inputs for infrastructure policy to promote the acceleration of KPPIP’s Priority Project delivery.

Firstly, KPPIP is actively involved in supporting State Asset Management Agency (LMAN) in the process of reimbursing monetary compensation by Toll Road Business Entity (BUJT) spent in advance for the purpose of land procurement for Priority Projects and National Strategic Projects. Several types of support provided are in the form of:

i. Determination of land financing for all National Strategic Proejcts reconfirmed under the letter from the Coordinating Ministry of Economic Affairs No. S-49/M.EKON/02/2017 to the Minister of Finance concerning Reimbursement of Bailout for Toll Road Projects;

ii. Drawing up a draft amendment to the Presidential Regulation (Perpres) No. 3 of the Year 2016 on the provisions for the permit for Determination of Project Area Location for the land procurement process.

Secondly, after the issuance of the Government Regulation No. 13 of the Year 2017 on National Spatial Planning, follow-ups to the implementation of the above-mentioned regulations will have to be conducted immediately. Since March 2017, KPPIP has prepared analysis of issues concerning spatial arrangement considered to delay the delivery of National Strategic Projects (PSN). Based on the analysis, alternative recommendations have been formulated for futher consultation with the stakeholders. Alternative recommendations that have been developed have taken account of follow-ups required for the application of the Government Regulation No. 13 of the Year 2017.

Further, KPPIP is also involved in providing responses and inputs to the draft Regulation of Indonesia Financial Services Authority (OJK) on the funds for Infrastructure Investment in the form of Collective Investment Contracts (Kontrak Investasi Kolektif). OJK undertakes the initiative to issue investment instruments in infrastructure in the Capital Market in order to bridge the gap in the source of funds required for infrastructure projects, and therefore, the draft regulation is required to initially drive all relevant stakeholders.

Based on the results of the study, it is expected that the acceleration in providing alternative infrastructure financing can be made by means of alternative investments for investors and promoting the diversity of investment products.

KPPIP’s Support for Policy on Acceleration of Infrastructure DeliveryC.


n accordance with Regulation of the Coordinating Minister of Economic Affairs (Permenko) Number 12 of the Year 2015 on Acceleration of Priority Infrastructure Delivery, KPPIP is assigned to accelerate delivery of 30 priority projects as regulated in the Attachment to the Permenko. These thirty projects consist of 4 toll roads, 6 projects in railway sector, 4 port projects, 1 project in science and technology, 9 projects in electricity sector, 3 projects in oil and gas sector, and 3 projects in drinking water, waste water, and dam.

In accordance with 2017 Business Plan, KPPIP conducts evaluation of the list of Priority Projects. Evaluation of the Priority Projects is performed by taking account of 2 aspects, namely the progress of Priority Projects and the potential contribution of KPPIP to the projects. The results of the evaluation are as follows:i. In the coordination meeting at ministerial level, it was agreed to delay the implementation of 2

Priority Projects (High Voltage Direct Current (HVDC) and South Sumatra 9 and 10 Mine Mouth Power Plant, and

(ii). based on KPPIP’s study, three Priority Projects (Karangkates IV & V Hydro-electric Power Plant (HEPP), Kesamben HEPP and Lodoyo HEPP), are not financially feasible if they are to be built using cascade system without electricity tariff adjustment. Consequently, these 5 Priority Projects are deleted from the list of Priority Projects.

Progress of Prioritization of Priority ProjectsD.

TOLL ROAD

1. Balikpapan – Samarinda Toll Road2. Manado – Bitung Toll Road3. Panimbang – Serang Toll Road4. Trans Sumatera Toll Road (8 sections)

ELECTRICITY

16. Indramayu Coal-Fired Power Plant17. High Voltage Direct Current (HVDC)18. 500 kV Sumatera Transmission 19. Central-West Java 500 kV Transmission Line20. Central Java Power Plant (CJPP)21. Karangkates Hydroelectric Power Plant IV & V(2x50 MW)22. Kesamben Hydroelectric Power Plant (37 MW)23. Lodoyo Hydroelectric Power Plant (10 MW)24. South Sumatera Mine Mouth Coal-Fired Power Plant 8, 9 and 10

OIL AND GAS

16. Bontang Oil Refinery17. Tuban Oil Refinery18. Refinery Development Master Plan (RDMP)/

(Balongan, CIlacap, Dumai, Balikpapan)

DRINKING WATER, WASTE WATER, AND DAM

28. West Semarang DWSS29. Jakarta Waste Management System30. NCICD Phase A

RAILWAY

5. SHIA Express Train6. MRT Jakarta North – South Corridor7. Makassar Pare-pare Railway8. Integrated LRT in Jabodebek9. LRT in South Sumatera10. East Kalimantan Railway

PORT

11. Kuala Tanjung International Hub Port12. Bitung International Hub Port13. Port in the Northern Java 14. Cikarang - Bekasi - Laut Inland Waterways

SCIENCE AND TECHNOLOGY

15. Palapa Ring Broadband


After the evaluation of Priority Projects was completed, KPPIP then selected infrastructure projects from the list of National Strategic Projects (PSN) to be part of the new Priority Projects. The list of PSN was used because the selection criteria for priority projects conform to those for priority projects as regulated in the Presidential Regulation Number 75 of the Year 2014, namely:

1. Conformity with the National Medium-Term Development Plan (RPJMN), Regional Medium-Term Development Plan (RPJMD) or the strategic plans of the sector,

2. Conformity with regional spatial plan,3. Infrastructure inter-sectoral and inter-regional relationship, 4. Its strategic roles in the economy, social welfare, national defense and security, and/or 5. The requirement for Government support and/or government guarantee for Public-Private

Partnership (PPP).

In order to select Priority Projects from the PSN list, KPPIP has developed selection criteria derived from 4 principles of KPPIP’s Priroity Projects, namely:

1. Projects with coverage as set out in Article 6 of Presidential Regulation No. 122 of the Year 2016,

2. Projects producing benefit to the public, the Government and Business Entities providing the infrastructure,

3. Projects whose delivery/provisions require KPPIP’s support due to various complexities such as coordination with stakeholders, project funding, procurement of licenses and permits, implementation of technologies, obtaining Government support, and synchronization in project implementation, and

4. Quick-win projects that are to be realized immediately. The four principles of Priority Projects

PIORITY PROJECT EVALUATION IS CONDUCTED BYTAKING ACCOUNT OF

1. PROGRESS in achieving project delivery, and

1. High Voltage Direct Current (HVDC)

2. South Sumatra Mine Mouth Coal-Fired Power Plant 9 & 10*

3. Karangkates Hydroelectric Power Plant IV & V (2x50MW)

4. Kesamben Hydroelectric Power Plant (37 MW)

5. Lodoyo Hydroelectric Power Plant (10 MW)

Meeting at ministerial level has approved PT PLN’s proposal to delay the implementation of the project

After being evaluated and by taking account of the existing electricity tariff, the cascade system proposed for the funding scheme of 3 Hydroelectric Power Plants was declared to be not feasible - the need for electricity can be met by expansion of Hydroelectric Power Plants.

2. KPPIP’S CONTRIBUTION to the project is pursuant to its mandate in Perpres 75/2014 j.o.

Perpres 122/2016

PROJECTS REASONS

The status of PLTU Mulut Tambang 8 remains as Priority Projects because it has reached PPA


are then developed into 8 priority projects selection criteria. These criteria are divided into 4 eliminating criteria, and 4 scoring criteria consisting of 20 sub-criteria.

Selection based on the criteria above results in 11 new Priority Projects and 1 existing Priority Project with expansion of project scope (Trans Sumatera Toll Road initially consisted of 8 lanes of toll road but 7 lanes are now added; and Mine Mouth Power Plants which were initially only located in South Sumatera but now are located in 5 provinces) to be determined as new Priority Projects.

4 PRINCIPLES OF PRIORITY PROJECTS TRANSFORMED INTO 8 CRITERIA*

1. Conformity with Perpres 122/2016

2. Certainty over GCA’s commitment

3. Significant achievement in 2019

4. Project value (except for pioneer projects)

1. Government guidance (max score: 8)

1. Instruments of Government guidance

4. Complex Coordination of Authority K/L/D (max score: 48)

1. Obtaining buy-in from stakeholders

2. Coordination in land procurement

3. Synchronization of spatial planning

4. Issuance of project license 5. Number of K/L/D requiring

coordination6. Issuance of

supplementary policy (general/sectoral)

7. Procurement of PPP8. Synchronization with

provision of other PSN3. Complexity of Funding

(max score: 24)1. Obtaining investor interest2. Determination of funding

scheme 3. Synchronization of PSO4. Grant of credit risk5. Grant of support for

business feasibility

2. Project preparation (max score: 20)

1. Completeness of OBC2. Economic benefit3. Complexity of technical

planning4. Support from Project

Development Fund 5. The need for infrastructure

in the project location

4 ELIMINATION CRITERIA 4 SCORING CRITERIA (20 SUB-CRITERIA)**

Note:

* Not for NSP which are already included in Priority Projects

** In order to obtain the order of the score of the projects passing elimination criteria


Profiles of the newly proposed 37 Priority Projects are as follows:

he 37 Priority Projects proposed above will be determined as Priority Projects under the Amendment to the Regulation of the Coordinating Minister for Economic Affairs Number 12 of the Year 2015 on Acceleration of Priority Infrastructure Delivery.

TOLL ROAD

1. Manado – Bitung Toll Road2. Panimbang – Serang Toll Road3. Trans Sumatera

Toll Road (8+7 sections)4. Probolinggo – Banyuwangi Toll Road5. Yogyakarta – Bawen Toll Road

ELECTRICITY

19. Central Java Power Plant (CJPP)/PLTU Batang20. Central - West Java Transmission Line21. Indramayu Coal-Fired Power Plant Indramayu22. 500 kV Sumatera Transmission 23. Mine Mouth Coal-Fired Power Plants (Sumsel,

Jambi, Riau, Kaltim, Kaltara)24. Gas and Coal-Fired Power Plants (16

Provinces)

OIL AND GAS

25. Bontang Oil Refinery26. Tuban Oil Refinery27. RDMP (Balongan, Cilacap, Dumai, Balikpapan)28. Abadi Field of WK Masela (Maluku)29. Gas Field Unitisation Jambaran - Tiung Biru

(East Java)30. Indonesian Deepwater Development (IDD)

(East Kalimantan)31. Tangguh Train 3 (Papua) Development

DRINKING WATER, WASTE WATER, AND DAMS

32. 32. West Sumatera DWSS 33. 33. Jakarta Waste Management System34. 34. NCICD Phase A35. 35. Jatiluhur DWSS (SPAM)36. 36. Lampung DWSS (SPAM)

WASTE TO ENERGY

37. Energy generated from waste in 8 cities (Jakarta, Tangerang, Bandung, Semarang, Solo, Surabaya, Denpasar, Makassar)

RAILWAY

7. SHIA Express Train8. North-South Lane of MRT Jakarta 9. Makassar Pare-pare Railway10. Integrated LRT in Jabodebek11. LRT in South Sumatera12. East Kalimantan Railway13. DKI Jakarta Public Railway

PORTS

14. Kuala Tanjung International Hub Port15. Bitung International Hub Port16. Patimban Port 17. Cikarang-Bekasi-Sea Inland Highways

SCIENCE AND TECHNOLOGY

18. Palapa Ring Broadband

Progress of Infrastructure Development in Indonesia

CHAPTER II


A.

The Government of Indonesia has determined the target for the development of infrastructure in the National Medium-Term Development Plan (RPJMN) 2015 – 2019. The target of this infrastructure development is part of the national development agenda to improve productivity and competitiveness in international market and to realize economic independency by activating the strategic sectors of domestic economy.

For this purpose, the Government devotes considerable attention to the development and expansion of infrastructure in the fields of logistics and energy. The target for the infrastructure development in National Medium-Term Development Plan (RPJMN) 2015- 2019 can be seen in Figure 2.1.

Achievement in Infrastructure Development


Banda Aceh

Belawan

Kuala Tanjung

Dumai

Batam

PanjangTj. Priok

Tj. Perak

LombokKupang

Palangkaraya Banjarmasin

Makassar

Maloy

Bitung

Halmahera

SorongJayapura

Merauke

Ambon

Cilacap

Padang

Enggano

Kertajati

Singkawang

Maratua

Pohuwato

Miangas

Namniwel

Moa

Taria

Kenyam

Aboy

K o r o w a y Batu

Sultan Hasanudin

Tojo Una-una

Muara Teweh

Pontianak

Pangkal Pinang

National Medium-Term Development Plan (RPJMN) 2015-2019

Developing a new oil refinery with a capacity of 2x300.000 barrels

Improving the capacity of the existing refineries in Cilacap and Balongan

Developing 33 new dams and 30 Hydro-electric Power Plants (HEPP)Improving irrigation system of 1 million haRehabilitating the existing irrigation system

Reaching the target of electrification ratio of 96.6% in 2019

Developing power plants with a total capacity of 35,000 MW

ENERGY

LOGISTICS

Developing Bus Rapid Transit in 29 cities

Developing MRT in 6 metropolitans and 17 bigcities

Developing 24 new ports

Building 60 jetties

Increasinng the number of ships

Development of 15 new airports

Improving the number of pioneer flights to improve connectivity between regions

Developing 2,650 km new roadsDeveloping 1,000 km new toll roads

Developing 2,159 km urban railway Developing 1,099 km inter-city railway


Based on the target of infrastructure development in RPJMN 2015-2019, the Government has determined 245 projects + 2 programs as National Strategic Projects under Presidential Regulation No. 12 of the Year 2015. Until the first semester of 2017, there were 26 National Strategic Projects from various sectors that have been successfully completed with a total investment value amounting to Rp 47 trillion. In addition, the Government has determined a list of priority infrastructure under Regulation of the Coordinating Minister for Economic Affairs No. 12 of the Year 2015 on Acceleration of Priority Infrastructure Delivery consisting of 30 projects divided into 43% at construction stage and 10% are at transaction stage as of June 2017.

In addition to physical achievements in the development, there are also a number of Government’s achievements in the aspects such as amendments to policies, which in turn will allow acceleration of infrastructure development. In the first semester of 2017, the Government specifically determined a number of regulations to overcome various major problems delaying infrastructure development. The regulations referred to here are: (1) Government Regulation No. 13 Year 2017 on National Spatial Plan (RTRWN) which will improve ways to remove obstacles resulting from non-conformity with spatial plan and (2) Regulation of the Minister of Finance No. 21 Year 2017 on the Procedure for Land Procurement for National Strategic Projects and Asset Management of Land Procurement by State Asset Management Agency (LMAN) which will enable acceleration of land procurement using business entity’s funds.

In order to handle potential social conflicts which in turn may delay the land procurement process, the Government has also issued Presidential Regulation No. 56 Year 2017 on Handling Social Impacts for the Purpose of Land Procurement for National Strategic Projects. This Presidential Regulation governs monetary compensation to be paid to the locals who are affected due to the need of the National Strategic Projects for the land but have no title over the land. From the aspect of funding, Regulation of the Minister of Finance No. 60 Year 2017 on the Procedure for the Grant of Central Government Guarantee for Acceleration of National Strategic Projects is expected to build confidence of Business Entities involved in National Strategic Projects (PSN), considering that compensation shall be provided for any delays fo the projects not attributable to Business Entities.


Indonesian Gross Domestic Product (GDP) in quarter I of 2017 was recorded at Rp 3,227.2 Trillion at a growth rate of 5.01% or increased by 0.09% compared to quarter I of 2016 which was 4.92%. A number of sectors related to infrastructure which contribute to the increase in the growth rate are:

Meanwhile, growth in infrastructure related sectors as currently experienced is affected by the Government’s more serious attention to the efforts to deliver infrastructure. One of the Government’s efforts to accelerate infrastructure delivery is by increasing the allocation of infrastructure expenditure budget in the State Budget from 2012-2016 which results in a strong correlation between the increase in GDP of infrastructure sector and the increase in Government’s expenditure for infrastructure, that is at a rate of 0.94.

• Construction industry contributes 10.25% of the total GDP at a growth rate of 0.61% in quarter I of 2017;

• Utility industry contributed 1.28% of the total GDP at a growth rate of 0.02% in electricity and gas procurement sector in quarter II in 2017.

• Labor absorption in construction industry as of February was 7.2 million people; • Labor absorption in utility industry as of February 2017 was 662,565 people or increasing

by 5% compared to February 2016 which was 628,013 people.

In addition to the increase in GDP, labour absorption in related sectors is also significant:

Correlation between infrastructure development and economic growth in Semester I of 2017

Positive Impact of Infrastructure Delivery on Indonesia’s Economic Development

B.

907,45

2012

Infrastructure Budget

In Trillion Rupiah

Gross Domestic Product of Infrastructure Sector

2013 2014 2015 2016

145,5 184,3 177,9290,3 317,1

1.011,8871.164,698

1.316,88

1.439,379

Analysis of correlation between the amount of infrastructure budget and GDP of infrastructure sector produces a coefficient 0.94%


In the context of National Strategic Projects (PSN), there are several indications that the development of projects listed as PSN has been stimulating the economy in the area locations where the projects are being developed. For example, in West Papua with PSN’s total investment value amounted to Rp 106 Trillion, the GDP of West Papua in construction sector was fairly significant at 12.45% (2014); 9.73% (2015); and 9.77% (2016) compared to the average GDP growth in the national construction sector which was only around 5%. Construction sector grows more significantly than the overall GDP of West Papua, that is 5.44% (2014); 4.1% (2015); and 4.52% (2016). Labour absorption in construction sector in West Papua also increased from 22,980 workers in Februaary 2014 to 30,388 in August 2016.

Construction sector also grows in other provinces with higher PSN’s investment value and PSN are at construction stage. For example, in East Java, the total investment value of PSN reaching construction stage amounted to Rp 83.4 Trillion, grew by 5.4% (2014); 3.6% (2015); and 5.07% (2016), whereas Central Java whose total investment value of PSN reaching construction stage amounted Rp 44.3 Trillion, growing by 4.38% (2014); 6% (2015); and 6.88% (2016).

Considering that the construction of PSN will still continue, the growth in construction sector and in the economy in general, as the impact of PSN, has the potential to continue increasing in the future. External factors such as the sluggish global economy remain to have influence in the current growth rate that is not optimum yet. As the economy is generally improving and the PSNs are in operation, the impact of the economy due to the implementation of PSN is also expected to be felt more by the public.


Due to the increasing demand for the funding of infrastructure development the Indonesian Government has determined various policies to attract participation of private sector in infrastructure development. Private sectors, both domestic and foreign, responded positively to these policies, that is proven, among others, by the increasing funds distributed to the sectors related to infrastructure.

The data provided by the Investment Coordinating Board (BKPM) show that there was a growing trend in investment plan in infrastructural sectors between 2011 and 2016. The total domestic and international investment plan in infrastructure sector reached Rp 820.1 Trillion (US$ 61.6 Billion) in 2016 which rose to Rp 113.1 Trillion (US$ 8.5 Billion) in 2011.

Increasing Interest of Private Sector in Investment

INVESTMENT PLAN IN INFRASTRUCTURE SECTOR(IN TRILLION RUPIAH)

2012

967,

68

60,1

9

2011

88,8

5

25,4

9

2013

250,

69

33,4

3

2014

311,

78

60,0

6

2016

507,

06

314,

66

Foreign Investment Domestic Investment

2015

520,

01

302,

43


Regardless of the increasing trend in planned investment in infrastructural sector, the realized investment did not show similar trend from 2011 to 2016. Both foreign investment and domestic investment in infrastructural sector show a decrease of Rp 83.8 Trillion (US$ 6.3 Billion) in 2016 compared to Rp 143.7 Trillion (US$ 10.8 Billion) in 2015 or Rp 105.1 Trillion (US$ 7.9 Billion) in 2011. The data on the planned and realized investment from 2011 to 2016 indicated that although interest in investment in infrastructure sector grew dramatically, still there are a number of factors that impeded realization of investment in Indonesia.

The trend is also shown in the rank of Ease of Doing Business published by the World Bank who ranked Indonesia the 91st, which is still far below other neighbouring countries in ASEAN such as Thailand at the 46th and Malaysia at the 23rd.

REALIZED INVESTMENT IN INFRASTRUCTURE SECTOR(IN TRILLION RUPIAH)

2012

55,5

5

22,1

0

2011

79,9

2

25,3

2

2013

51,9

9

50,4

1

2014

57,6

9 68,8

4

2015

87,2

3

57,5

4

2016

35,0

6

50,0

2

Foreign Investment Domestic Investment


On the other hand, a significant increase in investment flow to sectors related to infrastructure is also recorded in the capital market such as:

• Infrastructure Index Value (JKINFA) experienced a significant increase from 858 (April 2015) to 1,135 (April 2017);

• Increase in market capitalization value from issuers related to infrastructure, such as PT Adhi Karya who saw an increase in value from Rp 6.2 Trillion and the price per share from Rp 3,282 (December 2014) to Rp 8.37 Trillion and price per share is now Rp 2,350 (May 2017) or an increase of around 35% in the capitalization value within approximately 29 months;

• Increase in market capitalization value from issuers related to infrastructure, for example PT Waskita Karya’s experiencing an increase in value from Rp 14.2 Trillion and in price of share from Rp 1,479 (December 2014) to Rp 32.31 Triliun and price of share Rp 2,380 (May 2017), or an increase of around 127% of the market capitalization value within 29 months.

• Nevertheless, it is important to bear in mind that the increase in market capitalization value is significant for SOE issuers in infrastructure sector specially assigned by the Government to develop National Strategic Projects (PSN). In the future, the increase in market capitalization is expected to also impact on issuers of Business Entity in other infrastructure sectors.

Market capitalization value experienced an increase in value from Rp 6.2 Trilion in December 2014 to Rp 8.37 Trillion in May 2017.

ADHI KARYA

Market Capitalization Value

6.2 T

35%

2014 2017

8.37 T

Market capitalization value experienced an increase in value from Rp 1.2 Trillion in December 2014 to Rp 32.31 Trillion in May 2017.

WASKITA KARYA

14.2 T

127%

32.31 T

2014 2017

Market Capitalization Value


The growing interest of the private to participate in infrastructure sector is also seen in the positive response shown during market consultation of infrastructure projects conducted by KPPIP for Kuala Tanjung International Hub Port held in December 2016. A number of key players in port and logistic sectors were also present to provide inputs related to the results of OBC prei ented by the Consortium of Consultants comprising Mott MacDonald, Deloitte dan Hanafiah, Ponggawa & Partners (HPRP).

Market Consultation PHI Kuala Tanjung


Since the issuance of the first economic policy on 9 September 2015, deregulation in a number of sectors has been conducted to eliminate the existing duplicate and irrelevant regulations to promote the performance of industry which in turn will stimulate the sluggish economy and overcome depreciation of Rupiah against US dollar. To date, the Government has issued 14 economic policy packages and the last one was issued on 10 November 2016 which focuses on the roadmap of e-commerce business development covering funding, taxes, consumer protection, human capital, logistics, infrastructure of communications and cyber security.

In May 2017, Standard and Poor’s, (S&P) as an international debt rating institution ranked Indonesia feasible for Investment (Rank: BBB-), this higher rank is believed to be one of the results from implementing 14 economic policies which will improve the investment climate in Indonesia and build private sector’s confidence in investing in Indonesia.

The following is the summary of points in economic policy that have been introduced:

Economic Policy Package

Improvement to Regulations concerning Infrastructure C.

Economic Policy Package Points of Policy

I

Conducts deregulation of 165 regulations, expediting bureaucracy in permtis and licenses related to land procurement and other permits for infrastructure projects, reinforcement of legal certainty in land ownership and clarify procedure and completeness of documents required for licensing procedure.

IIFacilitates services in granting investment license in industrial zone, shortens the amount of time spent on getting tax allowance and tax holiday and eliminates VAT on modes of transport.

IIIReduces the price of fuel oil, gas, and basic electricity tariff for industry and simplifies land permits for the purpose of investment.

IVImproves labour system, increases profit system every year and supports policy on more widespread and affordable Credits for Micro, Small, and Medium Businesses.

VProvides incentives in the form of tax relief and asset re-evaluation of companies, SOE, and individuals to create a more transparent and efficient economic system and investment.

VIProvides incentives in the form of facilities for investment in Special Economic Zone, controls water resources and quick licensing process.

VII Provides facility for labour intensive industry in which PPh 21 is borne by the company.

VIIIOne-Map policy, accelerates the development of domestic oil refinery and provides incentives for companies providing maintenance service.


Presidential Regulation No. 14 of the Year 2017 on Acceleration of Electricity Infrastructure Development

Presidential Regulation No. 14 of the Year 2017 is a revision to Presidential Regulation No. 4 of the Year 2016 on Acceleration of Electricity Infrastructure Development issued on 13 February 2017, KPPIP supports the revised Presidential Regulation by discussing the topic at coordination meeting and providing input, in particular, concerning Local Contents (TKDN) and foreign cooperation.

The revision contains some new guidance such as:

• The Government provides support for the availability of fund for PT PLN in the form of state capital injection, Government subsidiary loan, PT PLN’s loan from financial institution, incentives and tax facility.

• PT PLN can increase its funding capacity by optimizing financial, hedging, refinancing assets and keeping down dividend payout ratio.

• Partnership between PT PLN and domestic or foreign business entity has strategic value in the form of funding, energy availability, transfer of technology and/or increase in domestic productivity.

• In order to increase domestic goods/services, PT PLN, subsidiary of PT PLN or PPL can have a partnership with foreign business entity committed to develop electirical equipment and components, national human capital, and transfer of technology required.

• Land procurement can be carried out by PT PLN, subsidiary of PT PLN or PPL.• Waste of coal fired power plants can be utilized as construction materials for infrastructure.

IXSupports the acceleration of electricity infrastructure development under Presidential Regulation No. 4 of the Year 2016 on Acceleration of Electricity Infrastructure in order to reach the target for electrification ratio of 97% in 2019.

XImproves protection for Micro, Small, Medium- Scale Businesses, and Cooperatives (UMKMK) by means of revising Investment Blacklist (DNI).

XI Improves goods flow at ports by means of Indonesia Single Risk Management (ISRM).

XIISupports deregulation effort to facilitate the running of business by reducing procedures from 94 to 10 to obtain permits and licenses to start a business.

XIIISimplifies the number and time spent on obtaining the permits to build houses for Low Income Economy from 33 permits/stages to 11 permits/recommendations.

XIVIssues E-commerce Map to support expansion and increase public economic activity across Indonesia efficiently and connected it globally.

XVImproves facility to run business and reduction in costs for business providing national logistic service.


The revision to Presidential Regulation is expected to improve the acceleration of electricity infrastructure and bring more added values to the country. Innovative mechanisms to improve PT PLN’s funding capacity are expected to accelerate funding stages of infrastructure projects in electricity. Land procurement that can be carried out by a subsidiary of PT PLN or IPP is expected to be able to accelerate land procurement process for electricity projects such as the one carried out by PT Waskita Karya in Sumatera 500 kV Transmission. Electricity projects satisfying TKDN criteria are also expected to be accelerated because Direct Appointment by PT PLN is now allowed if the requirements are met. Motivation to utilize wastes produced by coal fired power plants is expected to be a solution to the increasing wastes resulted from the increased activity of power plants.

According to KPPI’s mandate to determine the funding scheme and source of fund for priority projects and to decide the strategy and policy to accelerate priority infrastructure delivery, KPPIP provides support to the expansion of scope of duty and function of Public Service Agency of Indonesia Toll Road Authority (BLU BPJT). This expansion is necessary considering that toll road projects outside of Java are generally not feasible in terms of their finances. Consequently, government support such as Viability Gap Fund (VGF) is required. Nevertheless, VGF support making up 49% of the project construction value is quite burdensome for the country and as a result, it needs an alternative funding scheme such as Availability Payment (AP).

In AP funding scheme, a financially-unfeasible project can be provided with financial support in the form of periodic payment made annually based on the agreed-on rate of return by the government during concession. The support is given on condition that the Business Entity has successfully developed the project and provided infrastructure service according to the approved quality standards. One of the projects successful in implementing AP scheme is Palapa Ring project by House of Rural Telecommunication and Information Technology (BP3TI).

In order to carry out AP scheme, BLU BPJT must be capable of performing its function in managing Government investment in toll road development, and the functions are as follows:

• Receive funds for return on investment from toll road governed in Toll Road Concession Agreement;

• Manage income (performing its role as collection agent from Non-Tax State Revenue and make annuity payment from PBAS + to Toll Road Business Entity;

• Receive income from tender for operation and maintenance;• Performing its role as virtual clearing house for payment received from end user for

connected lanes of toll road, and• Manage and receive income from toll road completing its concession.

Expansion of the Scope of Duties and Functions of Indonesia Toll Road Authority as a Public Service Agency (BLU BPJT)

Improvement to Regulations concerning InstitutionsD.


To support this initiative, KPPIP continues to actively involve in coordinating several meetings that have been held. Up to the writing of this report, a number of meetings to discuss the development plan for BLU BPJT have been held. The meetings, among others, have approved action plans for expansion of BLU BPJT’s duty and functions. The meeting held on 13 April 2017 approved BPJT to conduct introduction internally at the Ministry of PWPH and PT PII will start drawing up the study/documents containing business plan, governance structure, and Minimum Service Standards (SPM).

In its progress, BPJT also involves several other institutions to study BLU BPJT’s development plan, and the World Bank is one of them. Therefore, in order to synchronize the drawing up of the study to avoid overlap and also considering its completion time, KPPIP used its own initiave to conduct a coordination meeting and make a progress report on the study prepared by PT PII. This coordination meeting was held on 20 June 2017 at KPPIP and it was decided that PT PII will continue preparing the study yet it is now focused on short-term solutions to be able to implement Availability Payment scheme in particular. The World Bank, on the other hand, prepares study on long-term scope such as expansion of duties, functions, and structure of BLU BPJT to be more optimal and sustainable.

In general, based on the approved action plans, the development progress of BLU BPJT is still according to schedule. If the process runs smoothly, it is expected of the Ministry of Finance to issue approval for expansion of BLU BPJT’s duties and functions in November 2017.

Public-Private Partnership (PPP) scheme is formed as one of the attempts to cover the limited fund that can be provided by the Government by means of State Budget/Regional Budget and SOE/RGOE by inviting private party to participate in supporting infrastructure development in Indonesia. In order to succeed in this attempt, the Government has conducted policy reforms and prepared isntruments needed to support the implementation of PPP scheme in Indonesia.

Policy reform is divided into three aspects, namely fiscal, institution, and regulation. In fiscal reform, the Government has issued several fiscal contribution such as Viability Gap Funding (VGF), Availability Payment (AP), Land Revolving Fund and guidelines for risk allocation as the basis for providing guarantee by PT Penjaminan Infrastruktur Indonesia (PT PII).

In terms of institutional reform, the Government has set up several institutions to play a role in accelerating infrastructure delivery such as Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) which has an active role in coordinating the acceleration of infrastructure priority projects, PT Sarana Multi Infrastruktur (SMI) and PT Indonesia Infrastructure Finance (IIF) as infrastructure financing institutions, BLU LMAN as fund provider land acquisition for

Progress of PPP in Indonesia

Funding Alternative SupportE.


National Strategic Projects, and PT Penjaminan Infrastruktur Indonesia (PII) as the facilitatior for Government guarantee. As for regulations in general, laws and regulations needed are available and ready for implementation.

The three aspects of reformation conducted result in a number of PPP projects that have reached important milestones as shown in the table below.

Government’s commitment to conduct fiscal, policy and institutional reforms as well as close coordination among stakeholders is expected to result in more PPP schemes implemented in Indonesia.

The positive impact of policy reform is in the implementation of Palapa Ring Broadband Project in West, Central and East Packages which is the first Public-Private Partnership (PPP) to implement Availability Payment (AP). Payment for this availability is guaranteed by PT Penjaminan Infrastruktur Indonesia.

These three project packages also successfully involve strategic investors and key financial investors capable of building trust and confidence of other potential investors in carrying out PPP projects in Indonesia. Not only is the benefit enjoyed by investors, but also by the Ministry of Communication and Informatics as Government Contracting Agency (GCA) could enjoy the benefit because this project allows transfer of knowledge from strategic investors to GCA and local investors. In addition, the capacity of GCA in procurement of PPP projects can be enhanced with fiscal support from the Government in the form of Availability Payment (AP).

No. Project Remarks Date

1 Palapa Ring Broadband West, Central and East Packages

Financial Close The last part was the East Package on 31 March 2017

2 Serang – Panimbang Toll Road PPP/ Toll Road Concession Agreement (PPJT)

22 February 2017

3 Pandaan – Malang Toll Road PPP/ Toll Road Concession Agreement (PPJT)

8 June 2016

4 Manado – Bitung Toll Road PPP/ Toll Road Concession Agreement (PPJT)

8 June 2016

5 Balikpapan – Samarinda Toll Road

PPP/ Toll Road Concession Agreement (PPJT)

8 June 2016

6 SPAM Umbulan Financial Close 30 December 2016

7 PLTU Batang Financial Close 6 June 2016


Progress of Implementation of Non-Government Budget Infrastructure Funding (PINA)

According to National Medium-Term Development Plan (RPJMN) 2015-2019, the total investment needed for infrastructure reaches Rp4,796.2 Trillion. Investment fund for infrastructure project sourced from the State Budget/Regional Budget reaches ~Rp1,900 Trillion or around 41% of the total need. Due to the limited investment fund that can be provided by the State Budget/Regional Budget, source of non-Government budget investment fund is needed and can be obtained from utilizing long-term immovable managed fund such as retirement fund and insurance both domestic and foreign to close the gap in infrastructure development funding.

As a result, the Ministry of National Development Planning (PPN)/National Development Planning Agency (Bappenas) initiated Non-Government Budget Investment Financing (PINA). PINA is Non-Government Budget Investment Financing that raises source of alternative funding to contribute to financing of national strategic infrastructure projects having commercial value and positive impact on improving Indonesian economy.

PINA is designed to cover the insufficient funds in priority intrastructure projects needing a large amount of funds yet considered commercially feasible.

KPPIP is involved in implementing alternative PINA scheme by including it in Presidential Regulation No. 58 of the Year 2017 on Amendment to Presidential Regulation No. 3 of the Year 2016 on Acceleration of National Strategic Projects. The Minister of National Development Planing/Head of National Development Planning Agency can further propose revision to National Strategic Project (PSN) having it funds sourced from non-Government budget to KPPIP.

To date, PINA has successfully promoted the financing of the initial stage of nine sections of toll road amounting to Rp 70 Trillion and five of them are Trans Jawa toll roads. In this PINA’s pilot program, PT Sarana Multi Infrastruktur and PT Taspen provide the initial stage of equity financing for PT Waskita Toll Road in the amount of Rp 3.5 Trillion and the total equity is now Rp 9.5 Trillion of the total need of Rp 16 Trillion.

Progress in Drawing up the Concept of Limited Concession Scheme (LCS)

In fulfilling the need for infrastructure funding, the Government is trying to implement several funding schemes. One of the schemes being studied by the Government by way of KPPIP is Limited Concession Scheme/LCS. By implementing this scheme, the Government is expected to obtain fresh money for infrastructure funding by optimizing the existing infrastructure assets through the given concession. The implementation of LCS tends to be easier because it takes shorter to prepare it (around 6-18 months), and the scheme has been successfully implemented in several countries which creates a good precedent for private sector.


At the end of 2016, KPPIP, in cooperation with Tusk Advisory Team of Consultants developed LCS concept and specially studied the potential of Soekarno-Hatta International Airport as a pilot project.

In general, LCS concept will create opportunities for private party by putting concession out to tender, which lasts between 20 and 30 years, to be involved in optimizing the existing infrastructure assets offered. Private party is expected to cooperate with SOE in implementing its best practice in managing infrastructure assets including the operation and maintenance of assets. Under this scheme, the Government can receive upfront or regular payment based on calculation of income before interest, tax, depreciation and amortization (Earnings before Interest, Taxes, Depreciation and Amortization/EBITDA) of assets and operational income distribution from private party winning the tender provided that concession adheres to the agreement as regulated in concession agreement.

Considering that asset valuation will refer to EBITDA, the implementation of LCS will be optimum on the existing assets or brownfield. Upfront or regular payment received and distribution of operational income can be utilized by the Government to fund other infrastructure developments especially those having low financial feasibility.

As a follow-up to the concept, KPPIP and Tusk Advisory Consultation Team have introduced LCS concept to the President through the Coordinating Minister of Economic Affairs, the Minister of National Development Planning/National Development Planning Agency, the Minsiter of Transportation and the elements of the Executive Office of the President, the Ministry of Finance, and the Ministry of SOE. In principle, the concept has been approved by the President to be followed up considering that the results obtained from implementing this concept can support the fulfillment of infrastructure funding needed.

In order to refine LCS concept, KPPIP collaborates with Hong Kong Shanghai Banking Corporation (HSBC) in conducting valuation on a number of airports having the potential for the implementation of LCS scheme. The collaboration is possible when the implementation of LCS scheme is already approved by the Minsitry of Transportation and the Ministry of SOE considering that the pilot project offered is Soekarno-Hatta International Airport and support in the form of sufficient data and information is needed to conduct the valuation.

KPPIP’s Achievements

CHAPTER III


One form of KPPIP’s support at the preparation stage in the development of Bitung International Hub Port is coordinating and facilitating the OBC prepared for Bitung PHI. The OBC of PHI Bitung is aimed at formulating synchronization and integration of Bitung PHI development with the existing port in Bitung, Bitung SEZ (KEK), and Lembeh Island as well as giving recommendation on regional development, alternative institutional pattern, and the optimum funding scheme.

KPPIP provides facility to design Terms of Reference (KAK) for procurement of OBC consultants by soliciting input from the stakeholders, in particular the Ministry of Transportation. In order to ensure that the OBC is acceptable to the market, OBC for PHI Bitung is prepared by referring to KPPIP’s OBC quality guidelines, yet adjustment will be made in compliance with Regulation of the Minister (Permen) Bappenas Number 4 of the Year 2015 on the Procedure for Public-Private Partnership in Infrastructure Delivery, if the outcome of the recommendation on the funding scheme for Bitung PHI indicates the formation of Public-Private Partnership (PPP).

In April 2017, KPPIP invited tender for procurement of consultants to prepare OBC for PHI Bitung with Owner Estimate (HPS) of Rp 9.4 Billion. Procurement of consultation service finished in May 2017 and the selected bidder is the consortium of PT Mott MacDonald Indonesia, PT Deloitte Konsultan Indonesia, and PT Hanafiah Ponggawa & Partners. OBC of PHI Bitung prepared by the consortium of consultants is expected to finish in December 2017.

Outline Business Case (OBC) of Bitung International Hub Port (PHI)

Support for Project PreparationA.


Masterplan of Patimban Port Intermoda

In order to ensure that the development plan for Patimban Port is inter-sectoral, KPPIP invited tender to the value of Rp 5.3 billion to draw up masterplan for highway and railway infrastructure to support integration of Patimban Port intermoda.

The masterplan prepared will result in recommendation for integrated infrastructure development plan including but not limited to national road, toll road and railroad tracks and by taking account of demand and easier access to Patimban Port as well as its synergy with the existing transportation infrastructure.

KPPIP has conducted consultation on Terms of Reference (KAK) and received inputs from the stakeholders including the Ministry of Public Works and Public Housing (PWPH) and the Ministry of Transportation. The designing of the masterplan started in June 2017 and is expected to finish in 2017.


Jakarta, Bogor, Depok, and Bekasi LRT

Determination of Project Funding SchemeB.

Light Rail Transit (LRT) Jabodebek is a railway project development of which has been assigned to PT Adhi Karya under Article 3 of the Presidential Regulation No. 65 of the Year 2016 on Amendment to the Presidential Regulation No. 98 of the Year 2015 on Acceleration of Integrated Light Rail Transit in Jakarta, Bogor, Depok and Bekasi. On 3 May 2017, the Government issued the Presidential Regulation Number 49 of the Year 2017 on the Second Amendment to the Presidential Regulation Number 98 of the Year 2015. Regulations concerning payment scheme for the development of facility under the Presidential Regulation Number 49 of the Year 2017 are as follows:

1. Payment for the development of LRT facility is made using the budget of the Ministry of Transportation and/or PT KAI.

2. If payment is made via PT KAI, the Government assigns PT KAI to conduct the operation, maintenance, management, and funding of facility procurement.

3. In order to accelerate the utilization of facility development, the Government assigns PT KAI to operate LRT Jabodebek facility and to run automatic ticketing system.

4. In order to improve the affordability of LRT Jabodebek tariff, the Government provides subsidy/aid in the form of Public Service Obligation (PSO).

In order to identify payment scheme for the development of the most basic facility for the State’s fiscal situation, KPPIP has conducted simulation to calculate fiscal burden of each return scheme, including subsidy for tickets needed to be provided throughout its operation. The returning scheme referred to encompasses:


West Semarang DWSS (SPAM) is a pilot project under the PPP scheme for cities in Indonesia. Project preparation included the determination of the funding scheme. In November 2016, the Minister PWPH sent letter No. PR.01.03-Mn/1096 regarding Operational Scheme for West Semarang DWSS (SPAM) to the Coordinating Minister of Economic Affairs to ask for guidance on the funding scheme for West Semarang DWSS (SPAM) project.

In response to the letter, DWSS (SPAM) development at the Ministry of PWPH, the City Government of Semarang, PDAM Kota Semarang, and PT IIF as the parties publishing Pre-Feasibiltiy Study of West Semarang DWSS (SPAM) in 2014. Based on the study conducted on technical and financial aspects, KPPIP and the stakeholders agreed on a PPP scheme as the funding scheme for West Semarang DWSS (SPAM) project.

Semarang Barat Drinking Water Supply System (SPAM)

1. Direct return according to achievement of infrastructure development using (1) direct State Budget’s fund (2) loan from multilateral institutions (3) loan from domestic banking syndicate (4) loan from PT Sarana Multi Infrastruktur2. Gradual returns using the budget of the Ministry of Transportation or the Ministry of Finance 3. Return with return on investment scheme

KPPIP has submitted its recommendation for payment scheme and estimated need for PSO to the Minister of Finance to be taken as one of the considerations in determining payment scheme to PT Adhi Karya for the infrastructure development of LRT Jabodebek.


The approval granted by the stakeholders is confirmed by the issuance of the letter from the Coordinating Minister of Economic Affairs to the Minister of Public Works and Public Housing (PWPH) No. S-55/M.EKON/03/2017 on 2 March 2017 containing decision that West Semarang DWSS is supported by adopting PPP funding scheme in accordance with the guidance given by the President of the Republic of Indonesia to involve private parties in infrastructure development as long as it is possible.

Project preparation is then continued by determining Semarang Regional Drinking Water Company (PDAM) as the GCA pursuant to Government Regulation No. 122/2015 and Ministerial Regulation No. 19/2016, and the provision of project development fund facility by the Ministry of Finance for West Semarang DWSS project in order to accelerate its preparation.

Following up the result of OBC prepared for Kuala Tanjung International Hub Port in December 2016, KPPIP has distributed the OBC documents and the result of discussions on it with the stakeholders at central and regional level. The recommendations offered in OBC can be carried out to determine the optimum funding scheme and to prepare infrastructure development plan in North Sumatera.

Based on the results of the analysis, the funding scheme offered is landlord scheme. This scheme allows a one-way chain of command for the development of Kuala Tanjung International Hub Port covering port area, port terminal and industrial zone. The bidding mechanism for Business Entity in every area will be further decided by the landlord so it will be open to the implementation of PPP scheme or assignment of SOE considering its >14% return on investment. The implementation of this landlord scheme allows the Government to provide support in terms of land procurement which covers port area, port terminal and industrial zone and whose management throughout the concession will be given to the successful bidder.

Kuala Tanjung International Hub Port


Given the scope offered is bundling of port area, port terminal and industrial zone, Memorandum of Understanding/MoU needs to be prepared to determine the landlord between the Ministry of Transportation and the Ministry of Industrial Affairs; the Ministry of Transportation will act as the landlord and the Ministry of Industrial Affairs continues to have authority over issuance of permits for the development of industrial zone. Based on the results of Committee Meeting held in June 2017, a further discussion is needed at technical level to agree on the follow-up for project preparation.

Palapa Ring Broadband project is divided into three packages, namely West, Central and East Packages. In mid-2016, West and Central Packages reached financial close. The financing of this project is sourced from syndicate of banks comprising PT Bank BNI (Persero), Bank Papua, Bank Maluku Malut, Bank Sulselbar, and Bank ICBC Indonesia. Total financing obtained from this syndicate of banks amounts to Rp4 Trillion or around 80% of project investment, which is Rp5.1 Trillion.

Following the financial close, the project covering 35 Districts/Cities in East Nusa Tenggara, Maluku, Papua and West Papua is expected to complete its construction within 18 months to allow its operation to start in September 2018. Becaues it is part of priority projects, KPPIP conducts monitoring of the projects’ progress with the Minsitry of Communication and Informatics (Kominfo), the Ministry of Finance, PT Sarana Multi Infrastruktur, and PT Penjaminan Infrastruktur Indonesia..

Financial Close of Palapa Ring Broadband East Package


Monitoring and Debottleneck-ing of Projects

C.

In order to meet the administrative prerequisite for foreign loan application to the Japanese Government through JICA, one of the requirements the Indonesian Government needs to meet through the Ministry of Transportation is the issuance of Environmental Permit. Its late issuance can delay the application process for foreign loan which can lead to the delay in the implementation of the project.

In order to prevent late issuance of Environmental Permit, KPPIP puts in effort to decide on the acceleration steps which are consulted beforehand and approved by the stakeholders, in particular the Ministry of Environment and Forestry.

KPPIP ensures that the completeness of documents and the quality of the content of EIA Documents are in line with the requirements for the issuance of Environmental Permit in order to prevent any delays due to repeated revisions.

Consequently, evaluation process of EIA Documents and completeness of other documents can be dealt with quickly by the Ministry of Environment and Forestry. The result is the issuance of Environmental Permit on 28 February 2017 and the application for foreign loan can be filed according to the project completion time as previously targeted.

Issuance of Environmental Permit for Patimban Port


The development of Phase I of South – North Jakarta MRT started in August 2013, and until April 2017 the construction progress of Phase I had reached 57.27%. However, although the construction has started, agreement between PT MRT Jakarta and the Provincial Government of DKI Jakarta on the governing of PT MRT Jakarta’s rights and obligations in the operation of the Facilities and Infrastructure of MRT has not been executed.

To solve this problem, KPPIP supports coordination between PT MRT Jakarta and the Provincial Government of DKI Jakarta as well as other related stakeholders to discuss the content of the draft Governor Regulation that will govern the assignment of PT MRT Jakarta in the operation of Facilities and Infrastructure of MRT. One of the inputs provided by KPPIP is the sustainable financial structure in the operation of Facilities and Infrastructure of MRT. The concept of this sustainable financial consists of farebox revenue, cost projection, non-farebox revenue, and Government contribution.

The result is Governor Regulation Number 53 of the Year 2017 on the Assignment of PT MRT Jakarta in the Operation of Facility and Infrastructure for Mass Rapid Transit promulgated on 25 April 2017. However, the detailed arrangement for the rights and obligations of PT MRT Jakarta and the Provincial Government of DKI Jakarta concerning the assignment of the operation of MRT’s Facility and Infrastructure in partnership agreement is being drawn up.

Issuance of Regulation of the Governor of DKI Jakarta No. 53 of 2017 on Assignment of PT MRTJ in the Operation of Facility and Infrastructure for MRT


At the beginning of 2017, Cilacap RDMP encountered obstacles in its EIA process. The EIA is a critical part of a project’s preparation stage, in particular the issuance of Environmental Permit, which is a prerequisite for the issuance of Location Permit. PT Pertamina expects that the Environmental Permit will have been issued before groundbreaking which is initially predicted to be in July 2017.

Conformity with spatial plan, and permits for facilities are parts of the requirements to start assessment of environmental documents, issuance of Environmental Permit, and Permit for Determination of Location. Actions to deal with issues of non-conformity with spatial plan and the unavailability of permits for national road diversion are needed in Cilacap Oil Refinery revitalization. The Spatial Arrangement in Regional Regulation of Kabupaten Cilacap No. 9 of the Year 2011 on the Regional Spatial Plan of Kabupaten Cilacap Year 2011-2031, part of Cilacap RDMP is located in the area designated for non-industry. In addition, part of the expansion area of Cilacap RDMP will also lie on a lane now used as a national road.

In order to expedite issues of non-conformity with spatial plan and diversion of national road groundplan, KPPIP facilitates coordination in adjusting the spatial plan and obtaining approval for national road relocation. Discussion Meeting held on 22 March 2017 on Conformity of Spatial Plan with RU IV Cilacap RDMP Development Plan was chaired by the Assistant Deputy of Spatial Plan and Economic Strategic Zone of the Coordinating Minister of Economic Affairs and involved all related Ministries/Government Agencies.

The meeting resulted in a decision that in principle and under complementary hierarchy, the location planned for the development of Cilacap RDMP has conformed with the Regional Spatial Plan of Central Java and of Kabupaten Cilacap to allow assessment of environmental documents, issuance of Environmental Permit, and permits for determination of location. The result of the meeting is used as the basis for the issuance of letter No. 149/200/IV/2017 concerning

Issuance of Recommendation Letter concerning Conformity with RDMP Cilacap’s Spatial Plan


Conformity of RU IV Cilacap RDMP Development Plan with the Spatial Plan on 27 April 2017 by the Directorate General of Spatial Plan, the Ministry of AASP/Land National Agency to the Governor of Central Java which reinforced the result of the meeting held on 22 March 2017.

The first meeting involving several parties related to diversion of national roads in particular PT Pertamina, the Directorate General of Bina Marga, and the Ministry of Public Works and Public Housing (PWPH) was held on 3 April 2017. Following the bilateral coordination between PT Pertamina and the Directorate General of Bina Marga, letter No. TN 13.03.Db/369.1 on the Approval for Principles of National Road Relocation in Kabupaten Cilacap was issued on 27 April 2017 by the Directorate General of Bina Marga.

Following the issuance of both letters, the EIA process started by the issuance of SK No. SK.22/PKTL/PDLUK/ PLA.4/4/2017 from the Director General of Forest Planology and Environmental Governance of the Ministry of Environment and Forestry on Terms of Reference on Envinronmental Impact Analysis (KA-ANDAL). The EIA will be followed by EIA meeting in mid-2017 which will continue with the issuance of the Environmental Permit.

Land procurement for Central-West Java Transmission Line started in 2016. Until May 2017 the progress of land acquisition for Tanjung Jati – Tx (Ungaran – Pedan) had reached 54%, wheras for Tx – Mandirancan- Indramayu- Cibatu Baru had only reached 8%. In land procurement process for this project, a number of obstacles encountered include the Extension of the Location Determination Permit for the sections in Central Java which has expired and difficulties in the procurement process of Village-Community-Owned Land. Both issues do not only prevent land procurement process but also slow down the construction of tower foundations. In order to promote the acceleration of the

Settlement of Land Procurement for Central-West Java Transmission Line


project, KPPIP and the Secretariat of the Vice President will hold a regular coordination meeting with stakeholders to conduct debottlenecking of problems encountered. On 20 April 2017, KPPIP organized a coordination meeting chaired by the Assistant Deputy of Energy Infrastructure of the Coordinating Ministry of Economic Affairs which also involved the related Ministries/Government Agencies.

The result of the meeting is first the issuance of Letter No. S-42/D.III.M.EKON/05/2017 by the Deputy of Coordination of the Management of Energy, Natural Resources and the Environment to the Director General of Land Procurement of the Ministry of Agrarian Affairs and Spatial Plan/National Land Agency concerning Application for Recommended Discretion over Extended Permit for Location Determination.

The issuance of the letter is aimed at providing recommendations for exemption from Law No. 2 of the Year 2012 from the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency to the Governor of Central Java to allow renewal of Extension of Location Determination Permit. The support provided by KPPIP, Secretariat of the Vice President, and the relevant Ministries/Government Agencies result in Letter of Exemption for Extended Permit for Location Determination which will be signed by the Minister of Agrarian Affairs and Spatial Planning.

The second result of the meeting is the issuance of Letters No. S-41/D.III.M.EKON/05/2017 Desa from the Deputy of Coordinated Management of Energy, Natural Resources and Environment to the Governor of Central Java concerning Request for Follow-up on Procurement of Village-Community-Owned Land. The purpose of issuing the letter is to enable the Provincial Government of Central Java to bridge law on land procurement and asset management of Village-Community-Owned Land (Tanah Kas Desa) so that procurement process for Village-Community-Owned Land can take place regularly.

The issuance of both letters is expected to lead to a smooth running and punctual land acquisition and development of Tower Foundations for Central-West Java Transmission Line.


In order to carry out the mandate of Presidential Regulation No. 75 of the Year 2014 on Acceleration of Priority Infrastructure Delivery, KPPIP has identified the zones within Jakarta Sewerage System (JSS) which have the potential to adopt Public-Private Partnership (PPP) scheme. KPPIP provides the facility to grant the request of Water Resources Office (Dinas Sumber Daya Air) of the Provincial Government of DKI Jakarta in a letter concerning Request for Assistance in Gap Study and Feasibility Study on JSS on 1 September 2016, and the result is expected to provide an indication as to which zones are to be prioritized for preparation after Zone 1 and Zone 6 which are in progress.

The identification is focused on PPP potential considering budget constraints faced by the Central Government and the Provincial Government of DKI Jakarta to develop infrastructure using fiscal financing when JSS development, which is a prerequisite for Tanggul Laut Jakarta, can no longer be delayed. Identification is facilitated by the aid provided by Indonesia Infrastructure Initiative (IndII) who appointed Mott MacDonald consultant to conduct scoping study.

The scoping study concludes that JSS Zone 2, 5, 8, 9, and 4+10 have the potential to adopt PPP scheme because these zones demonstrate a quite high financial feasibility based on its potential revenue calculated using gross floor area method. JSS zones other than the ones mentioned above need to be financed by the State Budget or Regional Budget because they are considered to have a lower financial feasibility making them unattractive to be offered to private parties. Prioritization of the above-mentioned JSS zones requires further evaluation and adjustment to prioritization of zones needed to support Jakarta Sea Wall project.

The study has been submitted to Regional Development Planning Agency (Bappeda) and Water Resources Office (Dinas Sumber Daya Air) of the Provincial Government of DKI Jakarta who will follow up by conducting prioritization of JSS zones in June 2017 and involving other stakeholders in the process. The result of prioritization will be available in July 2017.

Completion of the Study on the Indicated Funding Scheme for Jakarta Sewerage System


With reference to the Letter of the Minister of Public Works and Public Housing Number KU.0901-Mn/784 dated 23 August 2016 on Operation of Trans Sumatera Toll Road to the President Director of PT Hutama Karya (Persero), the Minister of Public Works and Public Housing appointed PT Hutama Karya (Persero) to build three additional sections in stages to Trans Sumatera Toll Road, namely Aceh-Medan Toll Road, Padang-Pekanbaru Toll Road, and Tebing Tinggi-Parapat Toll Road. As a result of the addition of sections, adjustment to the existing SLA is required to accommodate the addition by the Regional Government which also requires involvement of other governors, namely the Governor of West Sumatera and the Governor of Aceh. As a follow-up to this matter, KPPIP plays an active role in coordinating the drawing up of the revised documents and also the stakeholders involved. As an initial step, KPPIP formulates strategies and conducts analysis of the various options related to adjustment to this SLA. In addition, KPPIP also holds discussion on the substance of the revised SLA. Based on the result of the discussion that has been held, it is agreed that adjustment to SLA will be made by:

1. Revising the existing SLA thoroughly and covering revision based on Presidential Regulation No. 117 of the Year 2015 and asking all parties involved both the existing and new ones for re-signing.

2. “6 Parties” SLA is drawn up concurrently which will only bind the Ministry of Finance, the Ministry of Public Works and Public Housing (PWPH), the Ministry of SOE, the Provincial Government of Aceh, the Provincial Government of West Sumatera, and PT Hutama Karya (Persero) without nullifying the existing SLA.

The “6 Parties” SLA prepared simultaneously with the Existing SLA is drawn up due to the considerations that an official document is now needed to affirm the Regional Government’s commitment especially in license related to land procurement and loan application to Asian Infrastructure Investment Bank (AIIB) for sections of Pekanbaru – Padang Toll Road to the value of Rp 5 Trillion. It is expected of “6 Parties SLA” to complete earlier than revision to the Existing SLA.

Service Level Agreement (SLA) for Three Additional Sections of Trans Sumatera Toll Road


Following the issuance of Government Regulation No. 13 of the Year 2017 on National Spatial Planning, a follow-up is needed to impose the regulation. In order to ensure that Government Regulation No. 13 of the Year 2017 can be imposed on effectively and to promote the acceleration of National Strategic Projects, KPPIP analyzed potential problem in adjustment to spatial planning and land procurement. KPPIP has identified several potential problems in the implementation and among others are:

1. The potential conflicts of regulations between the Government Regulation No. 15 of the Year 2010 on the Operation of Spatial Planning and Government Regulation No. 13 of the Year 2017 on National Spatial Planning. The aforesaid conflict arises due to the difference between Article 165 in the Government Regulation No. 15 of the Year 2010 specifying that permit granted for the use of space must be in accordance with the Regional Spatial Planning at the district/city level and Article 144a of the Government Regulation No. 13 of the Year 2017 specifying that the permit for the use of space must be under Spatial Planning (RTRW) at the national level.

2. The unavailability of reference map at Regional Spatial Planning that can be used as the basis to determine the position and scope of the strategic projects specified.

3. The criteria for activities considered to be strategic and have great impact are not yet specific and prone to subjectivity (the parameters of the size have not been decided).

4. Without the parameters and limitation of a specific value of the parameter, there will be risks and difficulties in determining which projects fulfill the criteria as activities having strategic role under Government Regulation No. 13 of the Year 2017.

5. The absence of mandate for the Minister of AASP to formulate standardized guidelines in providing recommendations for utilizing space (recommendations are therefore prone to subjectivity).

KPPIP and the stakeholders in spatial planning are now preparing recommendations for settlement of problems and follow-ups required for every potential problem that has been identified. KPPIP will submit the recommendations to the Office of Deputy Assistant (Keasdepan) of Spatial Planning and Economic Strategic Zone of the Coordinating Ministry for Economic Affairs.

Government Regulation No. 13 of the Year 2017 on National Spatial Planning (RTRWN)

Achievements in Improving Regulations concerning Infrastructure D.


For the purpose of supporting the efficiency of licensing process of railway operation, the Government makes revision to the Government Regulation No. 56 of the Year 2009 on Railway Operation. In the earlier Government Regulation (GP) the mechanism to determine the Business Entity as the operator of public railway facility based on its source of investment has not yet been decided. This matter has impact on the lack of private party’s interest in acting as the initiator of the operation of public railway infrastructure.

The unregulated mechanism for determining Business Entity as the operator of public railway infrastructure requires the proposing Business Entity to go through bidding conducted by the Government although all investment for infrastructure development is sourced from the Business Entity’s fund.

Given this matter, the Government made revision to the Government Regulation No. 6 of the Year 2017 concerning the arrangement for determining Business Entity operating public railway infrastructure according to the project’s source of fund which is: (1) by tender or direct appointment if part or all investment is sourced from State /Regional Budget, (2) by not conducting tender if all investment is not sourced from State/Regional Budget and guarantee is not given by the Government, or (3) by appointment if no Business Entity is interested because the project is not financially feasible. Determination of Business Entity without holding tender is possible after Business Entity files an application to the Minister, Governor or Head of District/Mayor according to their respective authority.

Under this revised Government Regulation, Business Entity can be determined as the operator of public railway infrastructure without tender if all of its investment is not sourced from State/Regional Budget and does not require guarantee from the Government. In the future, the interest of Business Entity, especially that of private party, in the operation of public railway infrastructure is expected to grow.

Government Regulation No. 6 Year 2017 on Operation of Railway

List of Priority Projects

CHAPTER IV

List of 30 Priority Projects


LEGENDS

Waterand Sanitation Electricity Railway Telecommunications

Energy Road & Bridge Port


No. Project Name Implementing AgencyInvestment Value(IDR Billion)

Funding Scheme Location(on the Map)

1. West Semarang Drinking Water Supply System (SPAM)

PDAM Semarang 900 Has yet to be determined Central Java

2. Jakarta Sewerage System Provincial Government of DKI Jakarta

150,000(all zones)

State Budget with Foreign Loan (Japan) for Zone 1 and the same potential scheme for Zone 6

DKI Jakarta

3. National Capital Integrated Coastal Development (NCICD) Phase A

Provincial Government of DKI Jakarta and the Ministry of PWPH

2,400 APBN, APBD, SOE, RGOE, and Privat

DKI Jakarta

WAT

ER &

SAN

ITAT

ION



4 Bontang Oil Refinery PT Pertamina 197,580 PPP (with Government support)

East Kalimantan

5 Tuban Oil Refinery PT Pertamina 108,000 Assignment of Assignment of SOE with Strategic Partner

East Java

6 Refinery Development Master Plan (RDMP)

PT Pertamina 246,220 Assignment of SOE (can cooperate with strategic partner)

Cilacap, Central Java; Balongan, West Java; Dumai, Riau; Balikpapan, East Kalimantan; Plaju, South Sumatera

ENER

GYSUMMARY OF THE LIST OF KPPIP’S PRIORITY PROJECTSIn compliance with Regulation of the Coordinating Minister of Economic Affairs No. 12/2015

SPAM Umbulan Jakarta Sewerage System




7 High Voltage Direct Current PT PLN 33,400 APBN dengan Pinjaman Luar Negeri (JICA Loan)

South Sumatera, Lampung, Banten, West Java

8 Sumatera 500 kV Transmission

PT PLN 24,400 430 km with Build-Manage-Transfer scheme by SOE (PT Waskita Karya). Funding scheme for the remaining 900 km has not been decided

Sumatera

9 Central - West Java 500 kV Transmission Line

PT PLN 7,640 Funding by SOE with potential foreign loan or direct lending

Central Java and

10 Central Java Power Plant PT PLN 7,640 Funding by SOE with potential foreign loan or direct lending

Central Java and

11 Indramayu Coal-Fired Power Plant

PT PLN 20,000 PLN’s Budget (APLN) with Foreign Loan

West Java

12.A South Sumatera 8 Mine Mouth Coal-Fired Power Plant

PT PLN 18,000 Independent Power Producer (IPP)

South Sumatera

12.B South Sumatera 9 and 10 Mine Mouth Coal-Fired Power Plant

PT PLN 54,000 PPP South Sumatera

13 Karangkates IV & V Hydro Power Plant

The Ministry of PWPH 1,600 Has yet to be decided East Java

14 Kesamben Hydroelectric Power Plant

The Ministry of PWPH 1,100 Has yet to be decided East Java

15 Lodoyo Micro-Hydroelectric Power Plant

The Ministry of PWPH 300 Has yet to be decided East Java

ELEC

TRIC

ITY

PLTU Cirebon




16 Balikpapan – Samarinda Toll Road

Indonesian Toll Road Authority (BPJT)

9,970 PPP East Kalimantan

17 Manado – Bitung Toll Road Indonesian Toll Road Authority (BPJT)

5,120 PPP North Sulawesi

18 Serang – Panimbang Toll Road

Indonesian Toll Road Authority (BPJT)

5,330 PPP Banten

19.A Medan – Binjai Toll Road PT Hutama Karya 1,600 Assignment of SOE North Sumatera

19.B Palembang – Indralaya Toll Road

PT Hutama Karya 3,300 Assignment of SOE South Sumatera

19.C Bakauheni - Terbanggi Besar Toll Road

PT Hutama Karya 16,700 Assignment of SOE Lampung

19.D Pekanbaru – Dumai Toll Road PT Hutama Karya 16,200 Assignment of SOE Riau

19.E&F

Terbanggi Besar - Pematang Panggang - Kayu Agung Toll Road

PT Hutama Karya 21,950 Assignment of SOE Lampung and South Sumatera

19.G Palembang - Tanjung Api Api Toll Road

PT Hutama Karya 14,200 Assignment of SOE South Sumatera

19.H Kisaran - Tebing Tinggi Toll Road

PT Hutama Karya 13,454 Assignment of SOE North Sumatera

ROAD

& B

RIDG

E

Medan – Binjai Toll RoadPalembang – Indralaya Toll Road




30. The Ministry of Communication and Informatics

KPBU 5,130 PPP Across Indonesia

TELE

COM

MUN

ICAT

ION

SNo. Project Name Implementing Agency

Investment Value(IDR Billion)


20 MRT Jakarta North – South Lane

The Provincial Government of DKI Jakarta

17,012 (Phase I) State Budget and Regional Budget with Foreign Loan

DKI Jakarta

21 Soekarno – Hatta Airport Express Train

The Ministry of Transportation

24,500 Potential use of PPP DKI Jakarta and Banten

22 Makassar – Parepare Railway The Ministry of Transportation

8,250 State Budget South Sulawesi

23 East Kalimantan Railway PT Kereta Api Borneo 53,300 Private East Kalimantan

24 Light Train Transit South Sumatera


12,500 Assignment of SOE South Sulawesi

25 Light Rail Transit Jakarta, Bogor, Depok, Bekasi


23,000 Assignment of SOE DKI Jakarta and West Java

26 Kuala Tanjung International Hub Port


30,000 Potential use of PPP North Sumatera

27 Bitung International Hub Port The Ministry of Transportation

Estimation 34,000

Potential use of PPP North Sulawesi

28 Patimban Port The Ministry of Transportation

43,220 State Budget with foreign loan, Regional Budget, PPP, and Private

West Java

29 Inland Waterwys/ Cikarang- Bekasi – Laut

PT Pelindo 2 (has yet to be decided)

3,416 Potential use of PPP DKI Jakarta and West Java

TRAN

SPOR

TATI

ON


1. WEST SEMARANG DRINKING WATER SUPPLY SYSTEM (SPAM)

PROJECT PROFILE

West Semarang DWSS is a Drinking Water Supply System (DWSS) planned as a DWSS pilot project using PPP as its funding scheme in Indonesia. West Semarang DWSS will resolve clean water crisis and subsidence of ground level due to the use of ground water in the City of Semarang.

LATEST UPDATES

KPPIP has conducted analysis of OBC documents for West Semarang DWSS (SPAM) Project especially OBC as of June 2017, and it was concluded that the OBC still have some flaws that will impact on the success of PPP procurement. The result of KPPIP’s analysis has ben discussed with Regional Drinking Water Company (PDAM) Semarang and BPPSPAM which cover the following aspects:

• Survey and analysis of water needed in Semarang (real demand survey) • Forecast for water needed in Semarang especially in West Semarang• Business Plan of PDAM as an institution in non-revenue water management• Technical approach and capital investment value for pipeline network proposed to use HDPE type

of pipe

Regarding the matter, KPPIP will facilitate the refinement of OBC by conducting a study which includes real demand survey in the service area of West Semarang DWSS project and making calculation of capital expenditure on piping (the portion of distribution network and household network).

PROJECT SIGNIFICANCE

The project will use water produced by Jatibarang Dam to overcome the insufficient raw water in the city of Semarang whose water supply has been dependent on Kabupaten Kudus. This project is aimed at providing drinking water for 31 vilalges (kelurahan) in 3 sub-districts (kecamatan) where an estimate of 60 households are waiting to be connected to Drinking Water Supply System (SPAM) in West Semarang, Tugu, and Ngaliyan. This project is expected to be able to solve clean water crisis and reduce the use of ground water in Semarang.

Investment ValueFunding SchemeLocation Implementing AgencyTarget Construction DateCommercial Operation Date

: ~IDR 900 Billion: PPP: Central Java: PDAM Semarang:2018:2022


At the same time, the OBC was submitted to the Directorate of PDPPI of the Ministry of Finance and PT SMI to be granted a project development facility and to be able to make other improvements such as Semarang PDAM’s business plan regarding absorption.

Regional Spatial Planning Pre-Feasibility Study Feasibility Study Detailed Engineering Design (DED)

Has been specified Completed in 2017Expected to complete in

Semester 2 of 2017Expected to start in Semester I of 2018

EIA Environmental License Borrow-to-use Permit for Forest Area (IPPKH) Land Procurement

Has been issued Has been issued but had already expired N/A Awaiting location determination

Determination ofFunding Scheme Investment Tender Feasibility Support Guarantee

Has yet to be decided Expected to start in Semester 2 of 2017

In principle approval has been obtained

Letter of Intent fromPT PII has been issued

Financial Close Target Construction Date Commercial Operation Date

2018 Expected to start in Semester 2 of 2018 In principle approval has been obtained

PROJECT IMPLEMENTATION SCHEDULE AND PROJECT STATUS

FUNDING SCHEME

The Coordinating Minsiter of Economic Affairs has issued letter No. S-55/M.EKON /03/2017 which in essence supports PPP scheme for West Semarang DWSS (SPAM) project. In response to the letter, the Minister of Public Works and Public Housing has issued letter No. PR.01.03-Mn/301 which also supports the use of PPP for West Semarang DWSS Project.

FOLLOW-UPS

1. Improvement to OBC and design of FBC.2. Tender preparation for PPP

LAND PROCUREMENT

The Municipal Government of Semarang has allocated budget for land procurement and will prioritize land procurement for the location of intake and water treatment plant.


Investment ValueFunding Scheme

Location Implementing AgencyTarget Construction DateCommercial Operation Date

::

::::

IDR 70 TrillionState Budget with Foreign Loan (Japan) for Zone 1 and potential use of the same scheme for Zone 2, funding scheme for other zones have yet to be decidedDKI JakartaThe Provincial Government of DKI Jakarta2018 (Zone 1)2021 (Zone 1)

PROJECT PROFILE

Jakarta Sewerage System will handle domestic waste management in 15 zones (including the zones in operation) with initial development in Zone 1 and Zone 6. Both zones are expected to start their operations in the year 2022 with Zone 1 serving the central and north area, and Zone 6 will serve the western part. The total cost for Zone 1 is ± 8.1 Trillion, whereas the development of Zone 6 needs costs amounting to ±5 Trillion.

Zone 1 serves as the development for centralized waste management system consisting of:1) Waste Water Treatment Plant (IPAL); 1) piping system; 3) household connection with a coverage of 4,901 Ha. IPAL for Zone 1 will be built in Pluit with an average capacity of 198,000 m3 per day. At present, the acceleration is concentrated in Zone 1.


As a capital city, DKI Jakarta has developed into the centre for government, business, and industry. Because this development has occurred faster than the improvement to the disposal system to treat the waste produced, water supply and sanitation in Jakarta are getting worse. At the moment, the coverage ratio in DKI Jakarta is only 4% of the total area with pollution level at BOD 84 mg/l. This condition ranks DKI Jakarta second lowest in terms of sanitation among other capital cities in South East Asia. In addition, JSS is needed to support the effectiveness of National Capital Integrated Coastal Development (NCICD) which has also started its construction.

NCICD requires the acceleration of waste water management resulting in it being a special priority by the central government under the issuance of letter No: S-130/D. VI.M.EKON/09/2013 concerning Acceleration in the Development of Centralized Waste Water Management System in DKI Jakarta with a target to achieve a 75% coverage ratio for waste water service by 2022.

The development of Zone 1 and Zone 6 will increase the coverage ratio for waste water service in DKI Jakarta by 20%. It was expected that the commencement of project preparation for Zone 1 will serve as a

2. JAKARTA SEWERAGE SYSTEM


LATEST UPDATES

For Zone 1, a contract for consultant on Engineering Services (E/S) was signed 8 months later than the initial plan. In order to minimize the delay, Dit PPLP and JICA formulated steps that could be accelerated to put the project’s groundbreaking work back to 2018.

Zone 6 was at the stage of supplemental study, and an interim report on it had been completed by the end of Semester 1 2017. Selection of layout needed to be made based on the result of the supplemental study so that the project could be put in the revised green book. Supplemental study for Zone 6 was at the reporting stage of interim report by JICA to the Ministry of PWPH. It was expected that the result of the interim report will be sufficient as the requirement for loan application under design and build scheme for JSS Zone 6 in Bappenas’s 2017green book.

For other zones, Water Resources Office (Dinas Sumer Daya Air) of DKI Jakarta and Bappeda of DKI Jakarta were prioritizing zones, other than Zone 1 and Zone 6 to determine whose OBC needs number-one priority, using aid from donor or private investors interested in being unsolicited bidders.

spillover effect on the development of other zones. It is intended that the development of all JSS projects will exceed the target for waste service in DKI Jakarta.


Has been specified Completed in 2015 Completed in 2016 Expected to start in Semester 1 of 2017


Has yet to start Has yet to start Unnecessary Has reacheddetermination of location


State Budget with foreign loan Unnecessary Unnecessary Unnecessary


2017 2018 2022

PROJECT IMPLEMENTATION SCHEDULE AND STATUS OF JSS ZONE 1


FUNDING SCHEME

Based on the discussion meeting at Echelon 1 held on 9 February 2016, it was decided that Zone 1 and Zone 6 would be financed by State Budget using a foreign loan from ODA Japan as its source of funding.

The funding schemes for other zones have not been decided; however, based on the scoping study conducted by KPPIP with assistance from INDII, the zones, which have potential use of PPP and zones that must be funded by State/Regional Budget using loan or government sole budget in the given year, have been identified.

FOLLOW-UPS

1. Prioritization of zones other than Zone 1 and Zone 6 2. E/S process for Zone 1 3. Selection of WWTP’s layout for Zone 6

LAND PROCUREMENT

Land for Zone 1 is clean and clear and owned by PT Jakarta Propertindo meaning that it is under full ownership of the Provincial Government of DKI Jakarta.


Has been specified Completed in 2015 Completed in 2016 Expected to start in 2019


Has yet to start Has yet to start Unnecessary Has yet to start


State Budget with foreign loan Unnecessary Unnecessary Unnecessary


2019 2020 2024

PROJECT IMPLEMENTATION SCHEDULE AND JSS ZONE 6


3. NATIONAL CAPITAL INTEGRATED COASTAL DEVELOPMENT (NCICD) PHASE A

PROJECT PROFILE

National Capital Integrated Coastal Development (NCICD) is a development of a giant sea wall in the northern area of Jakarta Bay built to protect the capital from floods. Large lagoons will be built along the wall to contain the flow of 13 rivers in Jakarta (these water containers will serve as giant reservoirs). This mega project is to be constructed in three phases:

• Phase A: Phase A is focused on improving the existing coastal protection. Reinforcement and development of 30 km of existing coastal sea walls and construction of 17 artificial islands in Jakarta Bay. The launching of this first phase was in early September 2014. The construction started at the beginning of 2016.

• Phase B: Phase B is focused on the effort to build the west outer sea wall and a large reservoir estimated to be built from 2018 to 2022.

• Phase C: Phase C is focused on building the east outer sea wall which will start its construction after the year 2023. Several long-term developments on the eastern side of Jakarta Bay will take place by covering part of the bay if land subsidence in eastern Jakarta cannot be stopped. In its implementation, the east sea wall will be provided with a Tangerang Bekasi access toll road to reduce the impact of the closure.

Of these three phases, Phase A is KPPIP’s only current priority.


More than half of the Jakarta’s population live in the coastal area and urban major economic activities are also concentrated along the coast. In this area, there are 13 large rivers emptying into Jakarta Bay and 40% of its coverage is in lowlands which are lower than sea level when the tide rises. Floods along Jakarta’s coast have been exacerbated due to land subsidence caused by excessive extraction of ground water. The threat faced now requires a mega NCICD project which will be carried out in 3 stages and the first stage will be marked by raising the existing sea walls.


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IDR 2.4 Trillion for Phase A (exclusive of land acquisition cost)State Budget, Regional Budget, SOE, RGOE, and PrivateDKI JakartaProvincial Government of DKI Jakarta and the Ministry of PWPH20162018


LATEST UPDATES

Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (KLHS) were completed in December 2015.

Regarding NCICD of Phase A, although the division of Phase A Groundplan in DKI Jakarta had completed, determination of Phase A Groundplan was needed for Tangerang and Bekasi and Decision Letter for the determination was needed from the Governor of each respective province to continue the completion of the groundplan.

Regarding NCICD as a whole, the Ministry of National Development Planning/National Development Planning Agency (Bappenas) in cooperation with the Ministry of Environment and the Ministry of PWPH have completed a study to decide on the continuity of the NCICD project. KPPIP has been analyzing the results of the study in-depth.


Has been specified Completed in 2015 Completed in 2015 Completed in 2016


Has been issued Has been issued N/A Has yet to start


State Budget, Regional Budget, SOE, RGOE, and

PrivateN/A N/A N/A


2016 Estimated to finish in 2018 2018

ROJECT IMPLEMENTATION SCHEDULE AND PROJECT STATUS

FUNDING SCHEME

Funding for Phase A will be sourced from State Budget, Regional Budget, SOE, RGOE, and the private sector, and the allocation of funding will be based on the indicative groundplan determined. The next phase is planned to involve private parties who will invest in NCICD zone.


PROJECT PROFILE

Bontang Oil Refinery is a new oil refinery development project (Grass Root Refinery) with a fuel production capacity of minimum 300 thousand barrels per day which will be built in Bontang, East Kalimantan. Bontang Oil Refinery development planning will use configurations that will take account of other systems such as petrochemical facilities. The products of this oil refinery will be prioritized on satisfying the domestic need for fuel.


Considering the need for fuel and the effort to achieve domestic energy sovereignty, Indonesia needs growth in the oil refinery industry. Grass Root Refinery (GRR) and the Refinery Development Master Plan (RDMP) are needed to increase the supply of crude oil and fuel in Indonesia to reduce dependency on imports.

FOLLOW-UPS

Acceleration of the determination of Phase A groundplan for Tangerang and Bekasi was accompanied by the issuance of a Decision Letter from the respective Governor.

LAND PROCUREMENT

NCICD located north of Jakarta will conduct land reclamation where 90 million m3 of sand will be needed to build only the outer sea wall. An additional of 210 million m3 of sand will be needed for reclamation of 1,250 ha of land to be used as urban development area.

The Provincial Government of DKI Jakarta is identifying the areas to be raised and expansion of the sea wall needing land acquisition.

4. BONTANG OIL REFINERY


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IDR 197.58 TrillionAssignment of PT Pertamina and partnership with Private East Kalimantan PT Pertamina (Persero)20192023


LATEST UPDATES

Using KPPIP’s facility, the drawing up of Outline Business Case (OBC) was completed in February 2016 and it met the quality standard of KPPIP’s OBC. Based on the result of the OBC, at a committee meeting PPP was selected as the funding scheme for Bontang refinery project and PT Pertamina was appointed as the Government Contracting Agency (GCA).

IFC, who initially promoted itself as the Transaction Advisor for Bontang Oil Refinery, decided to draw back. The Ministry of Finance then sent a reply to Pertamina mentioning information on controlling right of recourse, handing over of assets post conccesion to Pertamina, options for Pertamina’s share ownership, and application for transaction assistance facility. IIGF then gave presentation to EMR and Pertamina on options for settlement of recourse.

In December 2016, the Minister of EMR changed the funding scheme for Bontang Oil Refinery project to assignment of PT Pertamina under Decision Letter of the Minister of EMR No. 7935 of 2016 on Assignment of PT Pertamina in the Development and Operation of Oil Refinery in Bontang, East Kalimantan.

KPPIP has held consultation to calculate the economic price of Bontang oil refinery’s products as governed in Presidential Regulation No. 146/2016. Three workshops were conducted on this study and the results of the study were completed on 28 October 2016.

A Project exposé was held on 28 February 2017 attended by 82 companies and 12 strategic partners. Twelve (12) investors requested information and 8 investors officially submitted proposal for partnership as a form of response to Request for Information. PT Pertamina then went through a selection process of these strategic partners.

Pertamina drew up agreements on the utilization of land from Management of State-Owned Assets to LMAN. PT Pertamina also submitted a proposal for Joint Operations (KSO) in the utilization of Management of State-Owned Assets to LMAN concerning the utilization of 460 ha of land. The Directorate General of State Assets Management (DJKN) conducted appraisal on reasonable contribution value and profit sharing.


Has been specified Completed in January 2016 Expected to complete at the end of 2017 Expected to finish in 2018


Expected to complete in 2018 Expected to complete in 2018

Awaiting Regional Spatial PLanning Has yet to start

PROJECT IMPLEMENTATION SCHEDEULE AND PROJECT STATUS


FUNDING SCHEME

Bontang Refinery project will be carried out under the assignment scheme of SOE and PT Pertamina as the Implementing Agency (under Decision of the Minister of EMR No. 7935 K/10/MEM/2016). PT Pertamina planned to involve private parties in a Joint Venture in the development and operation of the refinery.

FOLLOW-UPS

1. Monitoring of the appointment of private partnership by PT Pertamina.2. Monitoring of the issuance of Perda of Regional Spatial Planning of Bontang.3. Monitoring of approval for Joint Operations of land of State-Owned Assets and LMAN.

LAND PROCUREMENT

The Directorate General of State Assets Management of the Ministry of Finance will provide 300 ha of land in Kabupaten Bontang that can be utilized for the development of oil refinery through the utilization mechanism of State-Owned Assets under the scheme of Utilization Partnership.

Unfortunately, part of the land given for the refinery does not conform with the Regional Spatial Planning of East Kalimantan and the City of Bontang because part of the land is designated for conservation of mangrove forests. Its Regional Spatial PLanning is now under review to cover all land for the development of oil refinery.

Determination of location is still waiting for the revision to East Kalimantan’s Regional Spatial Planning and of the City of Bontang. However, the principal license for Bontang oil refinery development was issued on 3 May 2016 (letter no. 600/2250/ BPPD/Bangda).


Assignment of PT Pertamina Expected to start in 2019 Expected to start operation in 2023


PROJECT PROFILE

Tuban Oil Refinery is a new oil refinery development project with a capacity of 300 thousand barrels per day to be built in Tuban, East Java. The Tuban Oil Refinery development plan will adopt a petrochemical configuration (integrated with PT Trans Pacific Petrochemical Indotama).

LATEST UPDATES

PT Pertamina signed a partnership agreement with Rosneft on 26 May 2016 on the development of Tuban oil refinery. The JV agreement between Rosneft and PT Pertamina was signed on 5 October 2016. Its Basic Feasibility Study was completed in January 2017.

Continuing the result of a Committee meeting on 22 June 2016, the Technical Team of PT Pertamina and the Technical Team of the Provincial Government of East Java conducted a site visit and reached an agreement that Tanjung Awar– Awar Port will be built west of TPPI and land procurement cost will be borne by PT Pertamina.

The Directorate General of State Assets Management (DJKN) has issued Surat Persetujuan Kerjasama Pemanfaatan (KSP) of State Assets Management on land owned by the Ministry of Environment and Forestry followed by the drawing up of KSP agreement between the Ministry of Environment and Forestry and PT Pertamina. EIA started in December 2016 and projected to complete in June 2017. The groundbreaking was expected to start in July 2017.


Considering the need for fuel and effort to achieve domestic energy sovereignty, Indonesia needs growth in the domestic oil refinery industry. The development of Tuban Oil Refinery is expected to increase the supply of crude oil and fuel in the hope that it will reduce dependency on imports.

5. TUBAN OIL REFINERY



::

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IDR 199.3 TrillionAssignment of PT Pertamina with Private partnership (Investor: Rosneft)East JavaPT Pertamina20182021


FUNDING SCHEME

Tuban Oil Refinery Project is a Business-to-Business partnership project between PT Pertamina and Rosneft as the investor. The whole funding for project investment will be governed and provided by the investor.

FOLLOW-UPS

1. Implementation of ruislag between PT Pertamina and the Ministry of Environment and Forestry concerning land for Tanjung Awar-Awar Port.

2. Monitoring of funding plan for Tuban GRR project.3. Coordination in the utilization of State-Owend Assets of land owned by the Ministry of

Environment and Forestry.

LAND PROCUREMENT

Settlement of issues concerning Tuban Oil Refinery development plan overlaps that of Tanjung Awar-AWar Port on the land owned by the Ministry of Environment and Forestry and the settlement was decided on a Committee meeting on 22 June 2016. It was decided that the land owned by the Ministry of Environment and Forestry will be used for oil refinery. PT Pertamina gave its commitment to the Provincial Government of East Java to allocate a piece of land for the development of the port east of the land. An MoU between PT Pertamina and the Ministry of Environment and Forestry on ruislag scheme for the land is needed for the port.


Assignment of SOE Completed in May 2016 Not needed Not needed


Expected to complete in 2018 Completed In progress Expected to complete in 2017


Expected to complete in 2017 Expected to complete in 2017

Expected to complete in 2017 Has yet to start



Expected to complete in 2017 Expected to complete in 2018 Expected to start its operation in 2021


6. REFINERY ROAD MAP PLAN (RDMP)

PROJECT PROFILE

RDMP is a project to revitalize 5 existing refineries located in Cilacap, Central Java; Balongan, West Java; Dumai, Riau; Balikpapan, East Kalimantan; Plaju, South Sumatera; to increase the capacity of oil refinery in Indonesia.

LATEST UPDATES

The development of Balikpapan RDMP is currently being carried out by PT Pertamina, yet the engineering work was undertaken by Bechtel. UOP completed BFS in March 2015. BED was prepared by Axens, UOP, and CB&I was completed in January 2017. FEED ISBL is being prepared by Bechtel and was expected to complete in June 2017. The construction is expected to start in July 2017.

PT Pertamina who was initially tasked with the development of Cilacap Refinery, Dumai, and Balongan RDMP will now work with Saudi Aramco. However, in December 2016, PT Pertamina sent a letter of agreement on termination to Saudi Aramco for Dumai Refinery RDMP project and Balongan Refinery RDMP Project because the timeline for the development of both RDMP projects was not available.

For Cilacap RDMP, PT Pertamina is extending Head of Agreement with Saudi Aramco until the end of December 2016 to discuss the continuity of the partnership. BFS for Cilacap RDMP Cilacap was


Considering the need for fuel and effort to realize domestic energy sovereignty, Indonesia needs growth in its domestic oil refinery industry. Currently, Indonesia’s capacity to satisfy domestic need is still very low, which is only 48 days in 2013 and predicted to fall to 38 days in 2025. If left untreated, this condition will be a threat to energy sovereignty.

RDMP is needed at the same time as new oil refinery project (Grass Root Refinary) to increase the production capacity of the existing oil refinery in Indonesia. By revitalizing 5 refineries in Cilacap, Balikpapan, Plaju, Balongan, and Dumai, the production is estimated to increase by 150%.

Investment ValueFunding SchemeLocation

Implementing AgencyTarget Construction DateCommercial Operation Date

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IDR 246.22 TrillionAssignment of SOE (can cooperate with private)Cilacap, Central Java; Balongan, West Java; Dumai, Riau; Balikpapan, East Kalimantan; Plaju, South SumateraPT Pertamina (Persero)20172025


completed by UOP in December 2015. Recommendation letter concerning the spatial plan, principle license for diversion of road, and letter concerning Terms of Reference on Environmental Impact Analysis (KA ANDAL) was issued in April 2017. EIA (AMDAL) is expected to complete in July 2017.


Assignment of SOE Not needed Not needed

Balikpapan and Cilacap Refineries: 2016 Kilang Plaju, Balongan, Dumai: have yet to be determined


Has been specified Completed Completed

Balikpapan Refinery: June 2017

Cilacap Refinery: 2017

Plaju, Balongan, Dumai Refineries:Have yet to be determined


Balikpapan Refinery: completed in April 2017

Cilacap Refinery: expected to complete in July 2017

Plaju, Balongan, Dumai Refineries: have yet to be determined

Balikpapan Refinery: completed in April 2017

Cilacap: expected to complete in July 2017


Not needed Cilacap Refinery: acquisition of land owned by PT Holcim



Balikpapan and Cilacap Refineries:Expected to complete in 2017


Balikpapan Refinery: Expected to start in April 2017

Cilacap Refinery: Expected to start in 2017

Plaju, Balongan, Dumai Refineries : have yet to be determined

Balikpapan and Cilacap Refinery: 2019

Plaju, Balongan, Dumai Refinery: have yet to be determined


FUNDING SCHEME

PT Pertamina will act as the Implementing Agency for revitalization of all existing refineries. In terms of funding scheme, PT Pertamina can work with private party (B-to-B) to develop the refineries.

FOLLOW-UPS

1. Development of funding plan for RDMP project development. 2. Monitoring of EIA process by the Ministry of Environment and Forestry.

LAND PROCUREMENT

Land procurement is not necessary because the land used is the existing refineries owned by PT Pertamina (Persero).

7. HIGH VOLTAGE DIRECT CURRENT (HVDC)

PROJECT PROFILE

High Voltage Direct Current (HVDC) is an interconnected transmission system development project between Sumatera and Java, and one of its functions is to transmit electricity generated by PLTU Mine Mouth generation plants Sumatera Selatan 8, 9, and 10 to Java.


The HVDC project will develop ±742 km of transmission line and in its implementation needs 300 ha of land. HVDC transmission is designed to have power transfer capacity of 3,000 MW from Sumatera to Java aimed at increasing the capacity for electricity supply in Java in order to keep the production cost of electricy down by utilizing the abundant low grade coal in southern Sumatera.


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IDR 33.4 TrillionState Budget with foreign loanSouth Sumatera, Lampung, Banten, West JavaPT PLNAwating confirmation from PT PLN2024


LATEST UPDATES

PT PLN has confirmed that the target operation of Java – Sumatera power sharing using HVDC transmission will be in the year 2024.

LENGTH OF IMPLEMENTATION42 MONTHS

LENGTH OF IMPLEMENTATION 41 MONTHS

PACKAGE 1

PACKAGE 2

Converter/inverter station in Kabupaten Muara Enim (South Sumatera) & Kabupaten Bogor (West Java).

40 km of 500 kV DC undersea transmission network from Ketapang (Lampung) - Salira (Banten), crossing Sunda Strait.


500 kV DC of overhead transmission network from Muara Enim (South Sumatera) to Ketapang (Lampung) and Salira (Banten) to Bogor (West Java).

500 kV AC of overhead transmission network from Muara Enim (South Sumatera) converter station to PLTU Mulut Tambang and from Bogor (West Java) converter station to 500 kV Java-Bali Transmission System.

500 kV AC of overhead transmission network from Muara Enim (South Sumatera) converter station to 500 kV Sumatera transmission system.

PACKAGE 3

PACKAGE 4

PACKAGE 5


LENGTH OF IMPLEMENTATION31 MONTHS


FUNDING SCHEME

HVDC is planned to be built using State Budget with a loan from the Japanese Government (JICA). Loan with total value of IDR 18 Trillion is divided into 4 loan agreements and the first agreement was signed and drawndown as much as IDR 350 Billion for engineering service.

LAND PROCUREMENT

Land procurement reported until June 2016 is as follows:

South Sumatera• Land procurement for converter station and electrode station was completed for a

total of 76.3 ha of land. • Land for new tower pads acquired for 3 of the total 439 tower padsLampung• Land procurement for landing point was completed for a total of 76.3 Ha of land. • Land acquired for 23 tower pads of the total 606 tower pads neededBanten• Land procurement for electrode station with a total of 17.5 ha of land has not started • Land procurement for landing point was completed for a total of 3 ha of land. • Land for 85 of 241 tower pads has been acquired


State Budget with foreign loan Not needed Not needed Not needed


Has been specified Completed In progress Expected to complete in 2017


Awaiting confirmation from PT PLN



In June 2016, land procurement had reached 10%. To date, further progress on land procurement has yet to be reported.



Awaiting confirmation from PT PLN Awaiting confirmation from PT PLN 2024


FOLLOW-UPS

Awaiting confirmation from PT PLN concerning the timeline of HVDC development. To date, confirmation given has only been about the target operation which will be in 2024.

Bogor• Land procurement for converter station has been completed for 50 Ha of the 54 Ha of land needed• Land for 5 of the 123 tower pads needed has been acquired

The progress for land procurement after June 2016 has not been reported.

PROJECT PROFILE

The development of this Sumatera 500 kV Transmission is aimed at transmitting electricity generated by coal-fired power plant located north of Sumatera using 1,330 km of transmission line from Muara Enim, South Sumatera to Langsa, Aceh.


Sumatera Transmisison is needed to transmit electricity from PLTU in South Sumatera to the area north of Sumatera in an effort to improve public access to electricity.

FUNDING SCHEME

The tender for the first 430 km of the transmission (Aur Duri – Peranap – Perawang) was conducted and PT Waskita Karya was the winning bidder. The tender for procurement of 900 km 900 km of transmission was still awaiting confirmation from PT PLN. Until June 2017, land procurement had reached 70% for Aur Duri – Peranap – Perawang and the 17% of the foundations had been finished. The delayed issuance of

8. SUMATERA 500 KV TRANSMISSION


::::::

IDR 24.4 TrillionAssignment of SOE and PrivatePT PLNSumatera20162019


FUNDING SCHEME

PT PLN has selected PT Waskita Karya as the winning bidder for 430 km of New Aur Duri – Peranap – Perawang section.

LAND PROCUREMENT

PT Waskita Karya has started land procurement process for New Aur Duri – Peranap and Peranap – Perawang section. Until April 2017, PT Waskita Karya had conducted land acquisition for 619 tower pads (70%) of the total 907 tower pads needed.

Funding Scheme Investment Tender Feasibility Support Guarantee

Scheme determined is assign-ment of SOE or Private

Tender for Aur Duri – Peranap – Perawang section has been conducted

Not needed Not needed


Riau’s Regional Spatial Planning has yet to be made official

Completed Completed Completed


EIA for Jambi has completed and EIA for Riau is still in progress

Environmental License for Jambi has been completed but for Riau it is still in progress

IPPKH for Jambi and Riau are still in progress

Reaching 70% for Aur Duri – Peranap – Perawang section in May 2017



Aur Duri – Peranap – Perawang section has reached financial close

Started in July 2016 for Aur Duri – Peranap – Perawang section

Aur Duri – Peranap section is predcted to start its operation in July 2019

Regional Regulation (Perda) on Regional Spatial Planning of Riau caused the EIA process to be conducted concurrently with that of the Province of Jambi by the Ministry of Environment of Forestry because it is a cross-province project.


9. CENTRAL-WEST JAVA 500 KV TRANSMISSION LINE

PROJECT PROFILE

The development of 500 kV transmission is intended to transmit electricity generated in Central Java to load centers located in the Western part of Java. This transmission will be divided into several sections as follows:

FOLLOW-UPS

1. Monitoring of land procurement and construction for New Aur Duri – Peranap – Perawang section and completion of bidding stage for ~900 km Sumatera Transmission.

2. Processing of Regional Government Regulation (Perda) on Regional Planning for Riau to be led by the Coordinating Minister of Economic Affairs.

3. Processing of the EIA in Riau to be conducted concurrently with that of Jambi by the Minister of Environment and Forestry considering that it is a cross-province project.

On 16 September 2016, a discussion meeting on spatial planning concerning the development of SUTET 500kV New Aur Duri – Peranap – Perawang was specially conducted to aim at formulating and exercising discretion for the settlement of problems caused by the pending approval for the Regional Spatial Planning of Riau. The meeting resulted in the signing of recommendations to provide discretion that the development plan for SUTET 500kV New Aur Duri – Peranap – Perawang, which conforms with East Sumatera Transmission Network and Central Sumatera Transmission Network, can be continued. However, by the end of Semester 1 2017 the Determination of location submitted for Riau using the discretion mentioned had not been issued by the Governor of Riau.


::::::

IDR 7.64 TrillionSOE (PLN’s Budget)Central Java and West JavaPT PLN20172019


LATEST UPDATES

EPC contract on Section 1Tx (Ungaran-Pedang) – Batang, Batang-Mandirancan, and Section 2 Batang- Mandirancan was signed in March 2017. Borrow-to-use Permit for Forest Area (IPPKH) for Tanjung Jati - Tx is being processed at the Ministry of Environment and Forestry. Works on the foundations for 20 tower pads have been completed.

The land that had been acquired for tower pads along transmission line was 20% or 271 tower pads of the total 1,278 tower pads by the end of Semester 1 2017.


The transmission line from West Java to Central is needed to transmit electricity that will be produced by PLTU Indramayu (1.000 MW), PLTU Jawa 1 (1.000 MW), PLTU Pemalang (2 x 1.000 MW), PLTU Jawa 3 (2 x 660 MW), PLTU Jawa 4 (2 x 1.000 MW) and PLTU Batang (2.000 MW). Synchronization of development schedule and completion of all projects is therefore needed.

Section Length

Tanjung Jati – Tx (Ungaran – Pedan) 144 Km

Tx (Ungaran – Pedan) – Mandirancan 397 Km

Mandirancan – Indramayu 180 Km

Indramayu – Cibatu 260 Km


Completed Completed Completed Completed


Completed

Environmental License for 5 districts along Tanjung Jati- Tx (Ungaran-Pedan) needs renewal.

Permit for 12 districts along Tanjung Jati – Tx (Ungaran-Pedan), Tx (Ungaran-Pedan) – Mandirancan, and Indramayu – Cibatu Baru.

Tanjung Jati – Tx Section: 61%. Ungaran – Batang Section: 8%.Batang – Mandirancan Section 1: 11%.Batang – Mandirancan Section 2: 8%. Mandirancan – Indramayu Section: 5%.



FUNDING SCHEME

The development of this project uses PT PLN’s budget.

LAND PROCUREMENT

Land procurement has been conducted on:

• Tanjung Jati – Tx section; 61% of the land needed for tower pads has been acquired.• Ungaran – Batang section; 8% tower pads has been acquired.• Batang – Mandirancan 1 section; 11% of the land needed for tower pads has been acquired.• Batang – Mandirancan 2 section; 8% of the land needed for tower pads has been acquired. • Mandirancan – Indramayu section; 5% of the land needed for tower pads has been acquired. • Indramayu – Cibatu Baru section; no land has been acquired.

Several districts having Village-Community-Owned Land that have not acquired land for tower pads are located in Tx – Mandirancan, and Mandirancan – Indramayu sections. Several districts having land for tower pads that have not obtained Borrow-to-use Permit for Forest Area (IPPKH) are Tanjung Jati – Tx, Tx – Mandirancan, and Indramayu – Cibatu Baru sections.

Tx (Unggaran – Pedan) – Mandirancan section has completed its survey stage, recorded land ownership, soil investigation, and preparation for procurement documents. Project spatial planning has conformed to the issuance of the edict issued by BKPRN including for the City of Semarang.

Mandirancan – Indramayu and Indramayu- Cibatu sections is delegating land procurement for a total of 562 tower pads to Land Office.

Funding Scheme Investment Tender Feasibility Support Guarantee

SOE (PLN’s Budget) Not needed Not needed Not needed


Project development used PT PLN’s budget Expected to start in August 2017 Expected to start its operation in July 2019


FOLLOW-UPS

1. PT PLN will send a letter to the Ministry of Environment and Forestry containing information on the chronological sequence of the activities in Tanjung Jati – Tx in order to be able to continue with the issuance of Borrow-to-use Permit for Forest Area (IPPKH) without having to go through renewal.

2. Borrow-to-use Permit for Forest Area (IPPKH) for transmission in Tx-Mandirancan and Mandirancan-Cibatu sections in direct processing to the Ministry of Environment and Forestry because the 30 days needed for issuance of Technical Considerations from Indonesia State-Owned Forest Enterprise (Perhutani) has lapsed.

3. In order to support the acceleration of Location Determination renewal, the Head of Acceleration for Electricity Infrastructure Development (PIK) sent a letter to the Ministry of Agrarian Affairs and Spatial Planning/ National Development Agency to request dispensation. The letter will also attach Request Letter from PT PLN (Persero) to the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency dated 13 April 2017.

4. In order to accelerate procurement Village-Community-Owned Land, PT PLN will send a letter to the Provincial Government of Central Java to issue implementation guidance on Village-Community-Owned Land as a derivative Regulation of the Minister of Home Affairs No. 1 of 2016 and a reference for the implementation at the level of region and village. The implementation guidance from Kabupaten Kendal and Kabupaten Batang will be attached with this letter as a reference.

PROJECT PROFILE

PLTU Batang or Central Java Power Plant (CJPP) is an ultra critical coal-fired power plant with a capacity of 2 x 1.000 MW located in Kabupaten Batang, Central Java. PLTU Batang will be built by Special Purpose Vehicle (SPV) of PT Bhimasena Power Indonesia consisting of J-POWER (34%), Adaro (34%), and Itochu (32%). This project has obtained guarantee from PT Penjaminan Infrastruktur Indonesia (PT PII) and the Central Government against political risks and force majeure.

10. CENTRAL JAVA POWER PLANT (PLTU BATANG)


::::::

IDR 40 TrillionPPP and IPP PT Bhimasena Power IndonesiaBatang, Central Java PT PLN20162019



PLTU Batang or Central Java Power Plant (CJPP) is aimed at fulfilling the need for electicity in Java and is part of 35,000 MW of electricity supply program. As one of the first and largest pilot projects using PPP in Indonesia, PLTU Central Java has a strategic role in promoting private’s involvement in investment in infrastructure development.

LATEST UPDATES

PLTU Central Java reached Financial Closing on 6 June 2016. To date, the project has entered preparation stage for physical construction. PT BPI started part of the construction and consignment to court to pay monetary compensation to the locals affected by the development who earlier filed a law suit against land procurement.

FUNDING SCHEME

The funding scheme decided is Public-Private Partnership where the investor winning the tender is PT Bhimasena Power Indonesia formed by J-Power (34%), Adaro (34%), and Itochu (32%).

FOLLOW-UPS

Monitoring the construction stage.

LAND PROCUREMENT

Land procurement process has been completed.


IPP Completed in May 2011 Not needed Completed in May 2016


Has been specified Completed Completed Completed


Has been issued Has been issued Has been issued Completed



Completed in June 2016 At construction stage Expected to start its operation in 2019


PROJECT PROFILE

This coal-fired power plant with a capacity of 1.000 MW will generate electricity to supply to Java and Bali.


The development of this PLTU is aimed at supporting electricity supply system and reducing electricity crisis in Java and Bali. In addition, this project is also useful in creating economic growth and having a positive impact for the public by supporting growth in industrial zones in eastern Jakarta and West Java.

LATEST UPDATES

Determination of Location was decided on 24 May 2016 under the decision letter of the Head of the Integrated Licensing and Investment Board of West Java (Letter no. 590/03/14.1.02.0/BPMPT/2016). LAP document and Basic Design were initially predicted to complete in mid-2017.

11. INDRAMAYU COAL-FIRED POWER PLANT (PLTU INDRAMAYU)


::::::

IDR 20 TrillionState Budget with foreign loanIndramayu, West JavaPT PLN20172019


Has been specified Completed Completed In progress and the new completion target is not yet confirmed


In progress and the new completion target is not yet

confirmed


confirmed


confirmed

In progress and the new completion target is not yet confirmed



FUNDING SCHEME

It has been decided that PLTU Indramayu should use funds from the State Budget, together with a foreign loan amounting to USD 2 billion provided by JICA.

FOLLOW-UPS

1. Monitoring of finalization of LAP documents.2. Acceleration in the completion of land procurement process.

LAND PROCUREMENT

Determination of project location was completed in June 2016. Land procurement was at the final stage of Land Acquisition Plan (LAP) using funds provided by JICA. JICA wanted approval for LAP results from the locals who have land and those who do not but are affected by project development. The LAP document was in the final process of Division of Risks between PLN and JICA.


State Budget and foreign loan Not needed Not needed Not needed


In progress and the new completion target is not yet confirmed Predicted to start in Quarter III 2017 Predicted to start its operation in June 2019


PROJECT PROFILE

PLTU Mulut Tambang Sumsel 8 is a coal power plant under the ‘Mine Mouth” scheme having its plant located parallel to coal mining which can reduce transportation costs. This PLTU is planned to have a capacity of 1,200 MW and will be connected to 500 kV Sumatera Transmission, and Java-Sumatera HVD transmission.


Considering the great potential of coal and the development of coal power plant in Sumatera, the Indonesian Government has prepared a development plan for the plant and for transmission to provide a sustainable supply especially for Northern Sumatera which has the highest electricity consumption in the province.

LATEST UPDATES

The operational target was postponed to 2023 in connection with the completion of 500 kV Transmission of New Aur Duri to Muara Enim. of New Aur Duri to Muara Enim.

12A. SOUTH SUMATERA 8 MINE MOUTH COAL-FIRED POWER PLANT (PLTU MULUT TAMBANG SUMSEL 8)



::

::::

IDR 18 TrillionIPP and the winning bidder is PT Bukit Asam and China Huadian Corporation, forming consortium of PT Huadian Bukit Asam Power (HBAP)South SumateraPT PLNAwaiting confirmation from PT PLN2023


Has been specified Completed Completed Awaiting comfirmation from PT PLN’s Board of Directors



FUNDING SCHEME

PLTU Mulut Tambang Sumsel 8 is a project adopting the Independent Power Producer (IPP) scheme meaning that PT PLN would conduct a tender to select the Business Entity that will provide funds and develop the project. The winning bidder was PT Huadian Bukit Asam Power (HBAP), a consortium of PT Bukit Asam dan China Huadian Corporation.

FOLLOW-UPS

Receiving confirmation concerning project timeline from PT PLN that operation target would be in 2023.

LAND PROCUREMENT

The EIA for this project has been issued and land procurement has been conducted.


IPP Completed in December 2011 Completed Completed


Awaiting comfirmation from PT PLN Awaiting comfirmation from PT PLN Expected to start its operation in 2023


Had been issued Awaiting comfirmation from PT PLN’s Board of Directors

Awaiting comfirmation from PT PLN’s Board of Directors Completed


PROJECT PROFILE

PLTU Mulut Tambang Sumsel 9 & 10 is a coal-fired power plant adopting the “Mine- Mouth” scheme where the location of the plant is parallel to that of coal mining which can reduce transportation costs. This PLTU is planned to have a capacity of 1,200 MW and 600 MW which will be connected to HVDC transmission.


Like PLTU Mulut Tambang 8 project, the potential of coal and the development of coal-fired power plant in Sumatera has resulted in the Indonesian Government’s effort to design a development plan for the plant and the transmission in order to provide a sustainable supply to Sumatera and Java.

LATEST UPDATES

This project has been cancelled by PT PLN.

12B. SOUTH SUMATERA 9 & 10 MINE MOUTH COAL-FIRED POWER PLANTS (PLTU MULUT TAMBANG SUMSEL 9 & 10)


::::::

IDR 54 TrillionPPPSouth Sumatera PT PLNProject is cancelled by PT PLNProject is cancelled by PT PLN


Has been specified Completed Completed 2016


Discontinued Discontinued Discontinued Has yet to start



FUNDING SCHEME

PLTU Mulut Tambang Sumsel 9 & 10 has adopted a PPP scheme where PT PLN would conducta tender to for a Business Entity that will provide fund and develop the project.

FOLLOW-UPS

The project has been cancelled by PT PLN.

LAND PROCUREMENT

The project had yet to enter land procurement stage. Land procurement for PLTU Mulut Tambang was to be be conducted after determining the winner.

PROJECT PROFILE

PLTA Karangkates IV and V are pilot project Water-to-Energy programmes with PLTA Kesamben and PLTMH Lodoyo with a total combined capacity of 147MW. PLTA Karangkates IV & V are located along River Brantas, East Java.

13. KARANGKATES IV & V HYDROELECTRIC POWER PLANT (PLTA KA RANGKATES IV & V) (2X50MW)


PPP Discontinued Discontinued Discontinued


Discontinued Discontinued Discontinued


::::::

IDR 1.6 TrillionSOEEast JavaThe Ministry of PWPH20172020



PLTA Karangkates IV & V have the capacity to generate 100 MW of electricity and play a role in achieving the target to increase the renewal energy mix.

LATEST UPDATES

PLTA Karangkates IV & V experienced obstacles in making decisions on the funding scheme because the letter of appointment or official assignment for the consortium of SOE as the implementing agency was not available yet.

The Power Purchase Agreement (PJBL) experienced obstacles because the electricity prices per Kwh offered to PT PLN were too high due to the development costs of the Kesamben regulating dam that PLTA Karangkates IV-V have to bear.

KPPIP completed the review of FS for PLTA Karangkates IV & V and concluded that PLTA Karangkates IV & V can be built as the peaker without having to build a weir. In order to provide reasonable returns for the developers (if the development was done by the private sector), under this scheme the tariff that PT PLN must pay is USD 12-13 cent/Kwh. This tariff is still far above the tariff acceptable to PT PLN network peaker plant in East Java which is USD 6.5 cent/Kwh. The result of the review was submitted to PT PLN as a basis for making a decision on the continuity of the project.


SOE Not needed Has yet to start N/A


Has been specified Completed in August 2014 Completed in August 2014 Completed in OCtober 2015


Predicted to complete in 2017 Predicted to complete in 2017 Not needed Has yet to start

PROJECT IMPLEMENTATION SCHEDULE AND PROJECT STATUS OF PLTA KARANGKATES IV & V


Predicted to complete in 2017 Predicted to complete in 2017 2020


FUNDING SCHEME

The process of forming the consortium of SOEs consisting of PT Pembangkit Jawa Bali (PJB), PT Wijaya Karya, PT Waskita Karya, PT Hutama Karya, PT Brantas Energi, and Perum Jasa Tirta I had started. The determination of the funding scheme was prevented due to the absence of basis for assignment or appointment.

FOLLOW-UPS

Determination of funding scheme and implementing agency for PLTA Karangkates IV-V, PLTA Kesamben, and PLTMH Lodoyo are in accordance with Regulation of the Minister of PWPH No. 9 of 2016.

LAND PROCUREMENT

PLTA Karangkates IV & V will use the land owned by Perum Jasa Tirta I.

PROJECT PROFILE

PLTA Kesamben is one of the breakthroughs in accelerating the Water-to-Energy program with PLTA Karangkates IV and V, and PLTMH Lodoyo. The total capacity of the three PLTAs combined will be 147 MW. PLTA Kesamben is located in River Brantas, East Java.


PLTA Kesamben has a capacity to generate 37 MW of electricity and plays a role in increasing the renewable energy mix.

14. KESAMBEN HYDROELECTRIC POWER PLANT (PLTA KESAMBEN) (37MW)


::::::

IDR 1.1 TrillionSOEEast JavaThe Ministry of PWPH20172020


LATEST UPDATES

PLTA Kesamben was prevented from determining the funding scheme because the appointment or official assignment for the Consortium of SOEs as the implementing agency was not available yet.

The Power Purchase Agreement experienced obstacles because the electricy prices per Kwh offered to PT PLN were too high due to the high development costs for the Kesamben regulating dam that the project has to bear.

KPPIP completed the review of FS for PLTA Karangkates IV & V and concluded that Kesamben can be built as the peaker without having to build a weir. In order to provide reasonable returns for the developers (if the development is by private), under this scheme the tariff that PT PLN must pay is USD 12-13 cent/Kwh. This tariff is still far above the tariff acceptable to PT PLN network peaker plant in East Java which is USD 6.5 cent/Kwh. The result of the review was submitted to PT PLN as a basis for making decision on the continuity of the project.

FUNDING SCHEME

The consortium of SOEs consisting of PT Pembangkit Jawa Bali (PJB), PT Wijaya Karya, PT Waskita Karya, PT Hutama Karya, PT Brantas Energi, and Perum Jasa Tirta I had started this project. Determination of funding scheme was delayed due to the absence of basis for assignment or appointment.


SOE Not needed Had yet to start N/A


Has been specified Completed in August 2014 Completed in August 2014 Completed in October 2015


Expected to complete in 2017 Expected to complete in 2017 Not needed Had yet to start

PLTA KESAMBEN’S PROJECT IMPLEMENTATION SCHEDULE AND PROJECT STATUS


Expected to complete in 2017 Expected to start in 2017 2020


PROJECT PROFILE

PLTMH Lodoyo, one of the breakthroughs in Water to Energy acceleration program with PLTA Karangkates IV and V, and PLTA Kesamben with a total capacity of 147 MW. PLTMH Lodoyo, is located around the mouth of River Brantas, Central Java.


PLTA Lodoyo has the capacity to generate 10 MW of electricity and a role in increasing the renewal energy mix.

LATEST UPDATES

The Power Purchase Agreement (PJBL) experienced obstacles in its process considering that Special Purpose Company (SPC) had not been formed yet, and when it was formed, the consortium would seek permits for SIPPA and the next process. The formation of SPC by the consortium was awaiting confirmation from PLTA Karangkates IV-V and PLTA Kesamben development.

FOLLOW-UPS

Determination of funding scheme and the implementing agency for PLTA Karangkates IV-V, PLTA Kesamben, and PLTMH Lodoyo is in accordance with Regulation of the Minister of PWPH No. 9 of 2016.

LAND PROCUREMENT

Land procurement for PLTA Kesamben was still awaiting the signing of Power Purchase Agreement (PPA).

15. LODOYO MICRO-HYDROELECTRIC POWER PLANT (PLTMH LODOYO) (10MW)


::::::

IDR 300 BillionSOECentral Java The Ministry of PWPH20172020


FUNDING SCHEME

The consortium of SOEs consisting of PT Pembangkit Jawa Bali (PJB), PT Wijaya Karya, PT Waskita Karya, PT Hutama Karya, PT Brantas Energi, and Perum Jasa Tirta I had started the project. Determination of the funding scheme was delayed due to the absence of basis for assignment or appointment.

FOLLOW-UPS

Promoting official appointment of the consortium of SOEs for PLTA Karangkates IV-V, PLTA Kesamben, and PLTMH Lodoyo as the promoter of the formation of SPC.

LAND PROCUREMENT

PLTA Ledoyo does not need land procurement.


SOE Not needed Had yet to start N/A


Has been specified Completed in August 2014 Completed in August 2014 Completed in October 2015


Issued in January 2015 Issued in January 2015 Not needed Had yet to start



Expected to complete in 2016 Expected to start in 2017 2020


PROJECT PROFILE

Balikpapan – Samarinda Toll Road is 99 km in length running from Samarinda to Sepingan International Airport in Balikpapan. This toll road will be divided into 5 sections and is planned to have two lanes for each direction.


The development of this toll road will promote the development of industrial zones for palm, coal, oil and gas, and agriculture in both cities and along the toll road. This toll road project will also improve connectivity, reduce transportation costs, and travel time between Samarinda and Balikpapan.

LATEST UPDATES

The Investment tender for PPP Balikpapan - Samarinda Toll Road was completed in June 2016 and PT Jasamarga Balikpapan – Samarinda was selected as the Toll Road Business Entity (BUJT). The signing of Toll Road Concession Agreement (PPJT) was on 9 June 2016. In addition, this project was also provided with loan from PT Penjaminan Infrastruktur Indonesia (PT PII). Both loan agreement and recourse agreement were signed on 9 June 2016.

The Tender for construction was completed in February 2017 and the winning bidder selected on 11 November 2016 was PT Wijaya Karya SPMK. On the whole, the construction had reached 15% and section I progressed more quickly by finishing 53% of the total works. Land procurement had reached 92% of the total land needed.

16. BALIKPAPAN – SAMARINDA TOLL ROAD


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~ IDR 9.97 TrillionPPPEast Kalimantan Indonesia Toll Road Authority (BPJT)20172018


FUNDING SCHEME

Balikpapan - Samarinda Toll Road adopted Supported-Build-Operate-Transfer as its funding scheme where the Government develops part of the toll road and the remainder is put out to tender for private to invest. The Government’s portion for Section I is 22.03 km in length and Section V is 11.09 km. Financing of Section I was sourced from the State Budget and Regional Budget, whereas Section V was provided with a loan from the Government of the People’s Republic of China totalling IDR 720 Billion. Section II, III, and IV are to be built by investors winning the tender for PPP and designed to be financed by Contractor Pre-Financing (CPF) and therefore financial close was predicted to take place after the completion of construction at the end of 2018.

LAND PROCUREMENT

Land procurement for the five sections had reached 92% of the total land needed, and Section IV, which progressed the most slowly, had only reached 53%. Section I had completed land procurement process, whereas section 2 and section 3 had already reached 99% and 95% respectively.

Considering the topographical features of the area, which are mainly valleys and hills, additional ROW was needed in Tahura Bukit Soeharto. PT Jasamarga Balikpapan Samarinda submitted an application for additional ROW to the Minister of Environment and Forestry, the Governor of East Kalimantan, and copies were sent to KPPIP.

In connection with the application for additional land for ROW in Tahura, East Kalimantan to the Minister of Environment and Forestry, KPPIP assisted in coordinating an application for Joint Operation of Sanctuary Zone and Nature Conservation Area run by Jasamarga. The problem was solved by the issuance of a


PPP Completed in June 2016 Partial construction by the Government 9 June 2016




Completed Has been issued Has been issued Had reached 92%



Predicted to complete at the endof 2018

Started in 2017 (portion of Toll Road Business Entity) Started in 2016 (Government’s portion) 2020


FOLLOW-UPS

1. Acceleration of land procurement especially for Section IV – Section V.2. KPPIP advised PT Jasamarga Balikpapan Samarinda that addition of ROW could adopt the usual

mechanisms for land procurement.

confirmation letter from the Ministry of AASP/National Land Agency No. 1818/29.1-600/V/2017 on 3 May 2017 to the Head of Land Office of Kabupaten Kutai Kartanegara specifying that the 50 km of groundplan located in Tahura Buki Soeharto had been removed from the forest area and determined as Non-Forest Estate (APL). The letter enabled land procurement to be conducted as usual in compliance with the prevailing laws and regulations.

PROJECT PROFILE

The development of this 39-km toll road will connect Manado and Bitung, two big cities in the Province of North Sulawesi. This project is divided into two sections: Section I Manado – Airmadidi; Section II Airmadidi – Bitung.


Manado - Bitung Toll Road is expected to support the growth of the economy and tourism in Manado, North Minahasa, and Bitung and to serve as the main access road to Special Economic Zone (SEZ) and Bitung International Port.

17. MANADO – BITUNG TOLL ROAD


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~ IDR 5.12 TrillionPPPNorth Sulawesi Indonesia Toll Road Authority (BPJT)20162019


LATEST UPDATES

The Investment tender for PPP portion for Manado – Bitung Toll Road was completed in May 2016 and PT Jasamarga Manado – Bitung was selected as Toll Road Business Entity (BUJT) to build sections under a PPP funding scheme. The signing of Toll Road Concession Agreement (PPJT) was on 9 June 2016. In addition, this project also received a guarantee from IIGF. Both agreements on guarantee and agreement on recourse were signed on 9 June 2016. Land procurement for Section 1 (Manado – Airmadidi) had reached 69%, whereas Section 2 had only reached 28%. Application for Commencement Work Order (SPMK) for Section 2 was in progress and construction was expected to start immediately.

FUNDING SCHEME

Manado – Bitung Toll Road implemented a Support-Build-Operate-Transfer scheme where the Government builds part of the toll road and the remainder will go out to tender for private investors to bid. The Government’s portion, Section I, is 14.09 km in length and requires IDR 1 Trillion of funds sourced from the State Budget, Regional Budget, and a loan from the People’s Republic of China. Section II, which is 25.5 km in length, is the Private Sector’s portion.


PPP Completed in May 2016 Partial Construction by the Government 9 June 2016




Completed Has been issued Not needed Had reached 69% for Section I and 28% for Section II



Expected to complete in Quarter IIin 2017

Expected to start in Semester II 2017 (Toll Road Business Entity’s portion)

Started in 2016 (Government’s portion)

2020


FOLLOW-UPS

1. Acceleration in land procurement for Section I and Section II.2. Monitoring the drawndown of reimbursement for land procurement fund by LMAN which was still

delayed due to non-conformity of documents to the criteria.

LAND PROCUREMENT

Land procurement for this section started in June 2015 and 67% of the land needed for Section I (Manado – Airmadidi) had been acquired with support in the form of a budget from the Provincial Government of North Sulawesi, whereas land procurement for Section II had only reached 15%.

In order to expedite land procurement process, the Toll Road Business Entity (BUJT) will add more personnel for PPK Tanah in several areas where land procurement is needed. Based on the latest report, there had been an additional need for 300 plots of land following field engineering (relocation of interchanges and access to enter) resulting in land procurement target to complete in mid-218. Determination of Location for the additional piece of land was to be issued by the Governor of North Sulawesi next week.

On the other hand, concerning repayment of bailout given for land procurement and according to information provided by LMAN, complete documents were needed to confirm that all plots of land had been acquired were able to obtain reimbursement from LMAN.


PROJECT PROFILE

The development of this 83.6-km-long toll road is aimed at providing access to Tanjung Lesung Special Economic Zone (SEZ) and Ujung Kulon National Park. This project is divided into three sections: Section I Serang – Rangkasbitung; Section II Rangkasbitung - Bojong; Section III Bojong– Panimbang.


In addition to supporting the development of tourism in Tanjung Lesung and Ujung Kulon National Park, this toll road is expected to reduce costs of goods shipment from industrial zones in the Pandeglang region to ports in Jakarta and vice versa.

18. SERANG – PANIMBANG TOLL ROAD

LATEST UPDATES

Land Procurement planning completed on 23 May 2016, and this was signified by the handover of a Document on Land Procurement Planning to the Governor of Banten. Determination of Location was on 29 June 2017, the Consortium of PT Wijaya Karya Tbk., PT Pembangunan Perumahan Tbk., and PT Jababeka Infrastruktur was selected as the winning bidder for investment using SBOT method.

The project was at land procurement stage and conducting activities such as stocktaking and identification of control, ownership, usage, and utilization of land.


::::::

~ IDR 5.33 TrillionPPPBantenIndonesia Toll Road Authority (BJPT)20172019


Had been specified Completed Completed 2016



FUNDING SCHEME

At a KPPIP meeting held in June 2016 it was decided that Serang – Panimbang Toll Road would implement a PPP scheme with Government’s support in the form of partial development and a guarantee that the level of income would stay the same in order to reach an attractive level of feasibility for investors. The Consortium consisting of PT Wijaya Karya Tbk., PT Pembangunan Perumahan Tbk., and PT Jababeka Infrastruktur was approved as the winning bidder using SBOT method. However, the Indonesia Toll Road Authority (BPJT) and KPPIP were also conducting a study on opportunity for implementing an Availability Payment (AP) scheme on the Serang – Panimbang Toll Road. This study would also consider the preparedness and legality of Public Service Agency (BLU) of Indonesia Toll Road Authority (BPJT) managing the investment funds in the implementation of the AP scheme.

LAND PROCUREMENT

Land procurement for Serang – Panimbang Toll Road was at implementation stage following the issuance of Determination of Location for this Toll Road in June 2016. After the Determination of Location, land procurement was predicted to take 2 years to complete. The progress of land acquisition was at the implementation stage signified by activities and identification of control, ownership, usage, and utilization of land.

FOLLOW-UPS

1. Acceleration in land procurement after the issuance of Determination of Location by the Governor of Banten and the signing of Toll Road Concession Agreement.

2. KPPIP promoted the development of Public Service Agency (BLU) of Indonesia Toll Road Authority (BPJT) in order to improve the implementation of Availability Payment scheme on Serang – Panimbang Toll Road.


PPP Completed in February 2017 Expected to be budgeted in 2017 Budget Year Predicted to complete in 2016


Completed Had been issued Not needed At stocktaking stage and land identification


21 February 2017 Expected to start in October 2017 Early 2019


PROJECT PROFILE

Medan – Binjai Tol Road is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the South connecting two provinces at both ends of the island, Nangroe Aceh Darussalam and Lampung. This section is divided into 3 sections and will be located in North Sumatera to connect Medan and Binjai. The three aforementioned sections are (1) Section I: Tanjung Mulia – Helvetia; (2) Section II: Helvetia – Semayang; (3) Section III: Semayang – Binjai.


As part of JTTS network, this section is important to support goods and passenger traffic between Medan and Binjai. This project is expected to be an alternative route for vehicles to reduce the volume of traffic on the existing roads, ease access, and increase connectivity. Consequently, this toll road will contribute to the development of the area and the economic growth in Sumatera.

19A. MEDAN – BINJAI TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

Medan – Binjai Section of JTTS was at the stage of completing land procurement and construction. Construction of Section III had reached 99%, Section II had reached 95%, whereas Section I has only reached 16% and its construction was prevented by issues concerning land procurement that had not been resolved yet. Overall, the construction had reached 62% meaning that it progressed 1% more quickly than in the previous months, whereas land procurement had reached 88% of the total land needed.


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~ IDR 1.6 TrillionAssignment of SOE North Sumatera PT Hutama Karya20152017


FUNDING SCHEME

The development of Medan – Binjai Toll Road implemented assignment of SOE namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on Amendment to Presidential Regulation No. 100 of 2014 on Acceleration of Toll Road Development in Sumatera. Toll Road Concession Agreement (PPJT) for this particular section of toll road was signed in 2014. In the same year, the Government also provided support in the form of State Capital Injection (PMN) for PT Hutama Karya. The financing structure of this section was divided into 70% of PT Hutama Karya’s equity (supported by State Capital Injection (PMN)) and 30% loan from PT Sarana Multi Infrastruktur (PT SMI).

LAND PROCUREMENT

The progress of Section I was slowed down by land procurement which was also hampered by a dispute over Grand Sultan’s land now under discussion with the Ministry of AASP/National Land Agency. There are 378 Heads of Family (KK) cultivating the land owned by the Sultan and will probably need monetary compensation. Land acquisition has reached 88% to date.

FOLLOW-UPS

1. Acceleration in land procurement and construction for Section I and Section III.2. Coordination with the Ministry of AASP/National Land Agency to confirm settlement of dispute

over grant sultan in Section I.


Assignment of SOE N/A State Capital Injection (PMN) N/A


Had been specified Completed Completed Completed


Completed Had been issued Had been issued Had reached 88%



Completed Completed in 2015 December 2018


PROJECT PROFILE

This project is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the south connecting two provinces at both ends of this island, Nangroe Aceh Darussalam and Lampung. This 22-km section which is located in South Sumatera is divided into three sections: (1) Section I: Palembang – IC Pemulutan; (2) Section II: IC Pemulutan – IC KTM; (3) Section III: IC KTM – Simpang – Indralaya.


This section is expected to accommodate the projected growth of daily traffic between the City of Palembang and Indralaya on the southwest of Palembang. It is hoped that this toll road will split the volume of vehicles and promote economic growth in the area as well as accessibility from and to Indralaya and Palembang.

19B. PALEMBANG – INDRALAYA TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

Palembang – Indralaya section of JTTS was at construction stage and 53% of the overall construction works had been completed, that is 88% for Section I, 5% for Section II, and 65% for Section III. Compared to the previous month, construction progress was 2%, and the overall land procurement had reached 95% and 100% for Section I.


::::::

~ IDR 3.3 TrillionAssignment of SOE South Sumatera PT Hutama Karya20152018


FUNDING SCHEME

The development of Palembang – Indralaya Toll Road adopts assignment scheme to SOE, namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on Amendment to Presidential Regulation No. 100 of 2014 on Acceleration in Toll Road Development in Sumatera. The Toll Road Concession Agreement (PPJT) for this toll road was signed in 2015. In the same year, the Government also provided support in the form of a State Capital Injection (PMN) for PT Hutama Karya to support it in its assignment. The funding structure for this section consists of 70% of PT Hutama Karya’s equity (supported by State Capital Injection (PMN)) and 30% is a loan from PT Sarana Multi Infrastruktur (PT SMI).

LAND PROCUREMENT

Overall, land procurement had reached 95%. Procurement for Section I was completed in 2015, whereas Section II and Section III had reached 90% and 94% respectively.

FOLLOW-UPS

Acceleration in land procurement for Section II and Section III.






Completed Has been issued Not needed Had reached 95%



Completed Started in 2015 December 2018 (Section I)


PROJECT PROFILE

This project is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the South connecting two provinces at both ends of this island, Nangroe Aceh Darussalam and Lampung. This 140-km section, which is located in South Sumatera is divided into three sections: (1) Section I: Bakauheni – Sidomulyo; (2) Section II: Sidomulyo - Branti; (3) Section III: Branti – Terbanggi Besar.


This section will serve as a major access road from and to Bakauheni Port. Considering that Bakauheni is one of the major ports connecting Java and Sumatera, the existence of this section will significantly expedite distribution of goods and passengers arriving in Sumatera by sea.

19C. BAKAUHENI – TERBANGGI BESAR TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

Bakauheni – Terbanggi Besar section of JTTS was at land procurement and construction stage. The construction had reached 33% which increased 2% compared to last month, whereas land acquisition has reached 81% overall.


::::::

~ IDR 16.7 TrillionAssignment of SOE LampungPT Hutama Karya20152018


FUNDING SCHEME

The development of Bakauheni – Terbanggi Besar Toll Road adopts assignment scheme of SOE, namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on Amendment to Presindential Regulation No. 100 of 2014 on Acceleration in Toll Road Development in Sumatera. Toll Road Concession Agreement (PPJT) for this toll road was signed in 2015. In the same year, the Government also provided support in the form of State Capital Injection (PMN) for PT Hutama Karya to support PT Hutama Karya in its assignment. The funding structure for this section is 5% equity (supported by State Capital Injection (PMN)) and 55% loan.

LAND PROCUREMENT

The Government has determined the location for toll road groundplan and this was at implementation stage of land procurement and land acquisition for Section I had reached 66%, Section 2 84%, Section 3 86% and Section 4 85%. The progress of land procurement had reached 81%. The visit of KPPIP’s representatives to Bakauheni-Terbanggi Besar section reported that there was an issue of non-conformity with the Borrow-to-use Permit for Forest Area (IPPKH) issued and of overload at Regional Office (Kanwil) of National Land Agency (BPN) of Lampung. Therefore, if it became necessary, KPPIP would coordinate with PT Hutama Karya and Ministries/Government Agencies regarding the settlement of this problem.

FOLLOW-UPS

1. Acceleration in land procurement especially in Section 1.2. KPPIP will coordinate with PT Hutama Karya and Ministries/Government Agencies concerning

settlement of non-conformity issues with the map of Borrow-to-use Permit for Forest Area (IPPKH) and of overload at Regional Office (Kanwil) of National Land Agency (BPN) of Lampung.






Completed Had been issued Has been issued Had reached 18%



Completed Started in 2015 2019


PROJECT PROFILE

This project is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the south connecting two provinces at both ends of this island, Nangroe Aceh Darussalam and Lampung. This section is one of those located in the Province of Provinsi Riau and will connect Pekanbaru and Kandis and Dumai. This section is divided into 6 namely: (1) Section I: Pekanbaru– IC Minas; (2) Section II: IC Minas- IC Kandis; (3) Section III: IC Kandis Selatan – IC Kandis Utara; (4) Section IV: IC Kandis Utara – IC Duri Selatan; (5) Section V: IC Duri Selatan – IC Duri Utara; (6) Section VI: IC Dumai – Junction Duri.


Thi section will connect Pekanbaru (the capital of Riau) and Dumai. The potential development in agribusiness and in the status of Dumai as a city with a modern oil industry leads to expectations that this section will provide inmportant support to the development of industrial sector.

19D. PEKANBARU – DUMAI TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

Pekanbaru – Dumai section of JTTS was at land procurement and construction stage. New construction had just started and each section shows progress - Section I had finished 3%, while Section II and III had finished 1% each. The overall land acquisition had reached 39% of its target.


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~ IDR 16.2 TrillionAssignment of SOE RiauPT Hutama Karya20162019


FUNDING SCHEME

The scheme adopted for the development of Pekanbaru – Dumai Toll Road is assignment of SOE, namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on Amendment to Presidential Regulation No. 100 of 2014 on Acceleration in Toll Road Development in Sumatera. Toll Road Concession Agreement (PPJT) for the section of this toll road was signed in 2015. This section needs 70% of equity; however, limitations of State Capital Injection (PMN) require explorations of alternative sources of funding such as Medium-Term Notes.

LAND PROCUREMENT

Determination of Location by the Governor of Riau had been issued and the project was now going through land procurement process by the Government and the total land that had been acquired is 39%.

FOLLOW-UPS

1. Acceleration in the issuance of Environmental License and Feasibility of Environment.2. Explorations of alternative source of funding for Pekanbaru – Dumai section.


Assignment of SOE N/A Had yet to be determined N/A


Has been specified Completed Completed Being drawn up


Expected to complete in 2017 Awaiting the Governor’s signature

Predicted to complete in 2017. Awaiting issuance of Regional Spatial Planning of

the Province

Has reached 39%



Completed Predicted to start in 2016 2019


PROJECT PROFILE

This project is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the south connecting two provinces at both ends of this island, Nangroe Aceh Darussalam and Lampung. This section is located in Lampung and South Sumatera with a total length of 185 km. This section is divided into three, namely: (1) Section I: Terbanggi Besar – Mengala; (2) Section II: Menggala – Sp. Pematang; (3) Section III: Sp. Pematang – Kayu Agung. This section is a combination of the Terbanggi Besar – Pematang Panggang section (100 km) and Pematang Panggang – Kayu Agung (85 km).


As part of JTTS network, this section is very important for facilitating goods and passenger traffic from Bakauheni Port. This section is expected to be able to open access in the surrounding areas and to promote economic growth especially in the sectors of palm and rubber plantation. In addition, one of the vital roles expected is to cut down travel time and transportation costs spent on land modes of transport from Bakauheni Port to South Sumatera and other regions to increase economic growth especially in sectors of palm and rubber plantation.

19E&F. TERBANGGI BESAR – PEMATANG PANGGANG – KAYU AGUNG TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

This project’s Business Plan and Basic Engineering Design were being prepared by its consultant PT Hutama Karya. In addition, Land Procurement Planning for the 100-km Terbanggi Besar – Pematang Panggang was under review, whereas Determination of Location for Pematang Panggang – Kayu Agung a length of 77km was issued on 19 May 2016 and at the moment Land Procurement Document (DPT) for 8.6 km and the drawing up of EIA are under review. In addition, the works were also awaiting approval from the Ministry of SOE and the Ministry of PWPH on exploitation permit.

Investment Value

Funding SchemeLocation Implementing AgencyTarget Construction DateCommercial Operation Date

:

:::::

~IDR 21.950 Trillion (Terbanggi Besar - Pematang Panggang (100km): IDR 11,865 Trillion and Pematang Panggang - Kayu Agung (85km): IDR 10,085 Trillion)Assignment of SOE Lampung and North SumateraPT Hutama Karya20172019


FUNDING SCHEME

The scheme adopted for the development of Terbanggi Besar – Pematang Panggang Toll Road is assignment of SOE namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on Amendment to Presidential Regulation No. 100 of 2014 on Acceleration in Toll Road Development in Sumatera. The Toll Road Concession Agreement (PPJT) for this section of toll road was signed in June 2016.

LAND PROCUREMENT

Until May 2017, Determination of Location for STA 0+000 to STA 112+185 had been issued.

FOLLOW-UPS

1. Monitoring the progress of Business Plan and Basic Engineering Design.2. Promoting the expedited approval the Minister of SOE and the Minister of PWPH on

Exploitation Permit.3. Acceleration in preparing EIA.


Assignment of SOE N/A N/A N/A


Had been specified Completed Completed 2017


Being prepared Completed Has yet to start Had yet to start



Had yet to start 2017 2019


PROJECT PROFILE

Palembang – Tanjung Api-Api Toll Road is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the South connecting two provinces, namely Nangroe Aceh Darussalam and Lampung. This section is one of those located in South Sumatera.


This section will serve as a major connector for vehicle traffic transporting passengers and goods from Palembang to Tanjung Api-api SEZ and Tanjung Api-api Port being developed. Tanjung Api-api SEZ is an industrial center for palm industry and export processing industry.

19G. PALEMBANG – TANJUNG API-API TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

Feasibility Study and EIA have been completed and approved, whereas Environmental License was signed by the Head (Bupati) of Banyuasin District on 27 March 2017. This project is now drawing up its Basic Design and Business Plan, determining its source of funding as well as government support.


::::::

~ IDR 14.2 TrillionAssignment of SOE South Sumatera PT Hutama Karya20182020


FUNDING SCHEME

The scheme adopted for the development of Palembang – Tj. Api-api Toll Road is assignment of SOE, namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on Amendment to Presidential Regulation No. 100 of 2014 on Acceleration in Toll Road Development in Sumatera.

LAND PROCUREMENT

The project was going through survey and planning process.

FOLLOW-UPS

1. Drawing up of Basic Design and Business Plan. 2. Determination of source of funding and type of Government support.




Had been specified Completed Completed Being drawn up


Completed Has been issued Has yet to start Had yet to start



Had yet to start Expected to start in 2018 2020


PROJECT PROFILE

Kisaran – Tebing Tinggi Toll Road is part of Trans Sumatera Toll Road (JTTS) planned to run from the North of Sumatera to the South connecting two pronvinces, Nangroe Aceh Darussalam and Lampung. This section is one of those located in North Sumatera.


This toll road is expected to improve connectivity between regions in North Sumatera Utara and provide choices of means of transport with relatively lower costs compared to the existing road and faster travel time. In addition to being able to promote tourism in Tebing Tinggi, this project can also support aluminium industry located in Kabupaten Asahan and provide easier access and connectivity to Kuala Tanjung Port which is an international hub port.

19H. KISARAN – TEBING TINGGI TOLL ROAD (8 SECTIONS OF TRANS SUMATERA)

LATEST UPDATES

Kisaran – Tebing Tinggi Toll Road was at survey and planning stage. According to the minutes of meeting on 23 August 2016 at Indonesia Toll Road Authority (BPJT), a 15-km Indrapura - Kuala Tanjung section is now part of Kisaran - Tebing Tinggi Section and Toll Road Concession Agreement (PPJT) for Kuala Tanjung – Tebing Tinggi was signed on 22 February 2017. Kuala Tanjung – Tebing Tinggi Section will be later priotized for an earlier construction to accommodate the development of Kuala Tanjung Hub International Port. EIA (AMDAL) for Kuala Tanjung - Tebing Tinggi section was still being prepared to be put out to tender. In addition, feasibility study and business plan drawn up by the consultants was under review by Hutama Karya.


::::::

~IDR 13.454 TrillionAssignment of SOENorth Sumatera PT Hutama Karya20182019


FUNDING SCHEME

The scheme for Kisaran – Tebing Tinggi Toll Road adopts assignment of SOE, namely PT Hutama Karya under Presidential Regulation No. 117 of 2015 on amendment to Presidential Regulation No. 100 of 2014 on Acceleration in Toll Road Development in Sumatera. The Government is studying the source of funding and form of government support for all sections on Kisaran – Tebing Tinggi Toll Road.

LAND PROCUREMENT

The project was at survey and planning stage.

FOLLOW-UPS

1. Completion of EIA (AMDAL) documents for the issuance of Environmental License so that the project can proceed to Land Procurement Planning for Kuala Tanjung – Tebing Tinggi section.

2. Determination of source of funding and form of Government support.3. Proceed with technical preparation for construction.




Had been specified Completed Completed Predicted to complete in 2017


Had yet to start Had yet to start Had yet to start Had yet to start



Had yet to start Predicted to start in 2018 2019


PROJECT PROFILE

The development of Mass Rapid Transit (MRT) in the capital is aimed at improving public transport facility and to reduce traffic congestion in Jakarta. The first stage of this project consists of 2 phases: (1) Lebak Bulus- Bundaran HI and (2) Bundaran HI - Kampung Bandan.


MRT Jakarta is a public transport which will help solve traffic problems, increase the mobility of Jakarta’s residents, reduce carbon emission and create employment opportunities in DKI Jakarta.

20. MRT JAKARTA NORTH-SOUTH CORRIDOR

LATEST UPDATES

Activities being performed for Phase I ranged from construction of depots, corridors, and stations. Until 30 June 2017, the construction development of Phase I Lebak Bulus – Bundaran HI had reached 60.77%, which increased by 1.64% from end of May 2017. Acceleration effort had been undertaken to confirm fund availability by means of loan to fund variation order of Phase I and development of Phase II to reach Phase I’s operational target in March 2019 and Phase II’s construction target in December 2018. The readiness criteria to obtain a loan to fund the development of Phase II were submitted to the Minister of Transportation on 26 May 2017. Supporting data that comply with regulations of the Provincial Government of DKI Jakarta were needed to obtain a loan to fund variation order of Phase I.

Phase II received a Letter from the Governor of DKI Jakarta specifying that the development plan for MRT’s depots in East Ancol was changed and that it would stick to the initial design which is located in Kampung Bandan. PT KAI submitted its in-principle approval for the development of MRT’s depots in Kampung Bandan. The groundplan for Phase II was to be officially determined in mid-2017.

Governor Regulation No 53 of 2017 on Assignment of PT MRT Jakarta for the Operation of Infrastructure and Facility for Mass Rapid Transit had been issued. An Operation Agreement that officially governs the rights and obligations of PT MRT Jakarta in MRT such as the period of railway infrastructure operation, risk allocation between the implementing party and the Provincial Government and other parties was to be drawn up. PT MRT Jakarta was to conduct several studies on the content of Operation Agreement.



::

::::

IDR 17 Trillion (Phase I) and IDR 22.5 Trillion (Phase II)State Budget and Regional Budget of the Provincial Government of DKI Jakarta and Foreign Loan DKI JakartaPT Mass Rapid Transit Jakarta2013 (Phase I) and 2018 (Phase II)2019 (Phase I)


LAND PROCUREMENT

According to the report released by PT MRT Jakarta, 487 of the 637 plots of land needed had been acquired by the Highway Construction and Maintenance Office (Dinas Bina Marga) and Transportation Office (Dinas Perhubungan dan Transportasi) of the Provincial Government of DKI Jakarta at the beginning of 2017.

FUNDING SCHEME

Phase I of MRT Jakarta project North – South corridor will spend funds provided by the State Budget and Regional Budget with a foreign loan sourced from the Japanese Government’s Official Development Assistance (ODA) amounting to IDR 14.3 Trillion. This foreign loan will be divided into three loan packages, namely Package 536 as much as JPY 1.87 Billion, Package 554 amounting to JPY 48.15 Billion and Package 571 as much as JPY 75.22 Billion.

The project was filing a loan application and the loan needed to fund variation order for Phase I wasIDR 2.56 T and IDR 22.545 T for the development of Phase II.

FOLLOW-UPS

1. National Development Planning Agency (Bappenas) will publish Green Book 2017 at the end of July 2017.

2. The Ministry of Transportation was expected to provide technical recommendations for Phase II Groundplan in July 2017 resulting in the determination of Groundplan for Phase II by the Governor of DKI Jakarta could be conducted in August 2017.

3. JICA’s pledge target in November 2017. 4. Loan Agreement was expected to be signed in April 2018.




Had been specified Phase 1: CompletedPhase 2: Completed

Phase 1: CompletedPhase 2: Completed

Phase 1: Completed Phase 2: 2016-2017


Completed Has been issued Not needed Determination of Locationhad been issued



Completed in December 2015 Phase 1: August 2013Phase 2: 2018

Phase 1: Phase to complete in 2019 Phase 2: Phase awaiting confirmation

from PT MRT Jakarta


PROJECT PROFILE

The Airport Express Railway Project is the development of alternative mode of transport to Soekarno-Hatta International Airport (SHIA). In 2013, the Ministry of Transportation determined the groundplan for SHIA Express Railway using Halim – Manggarai – Dukuh Atas – Tanah Abang – Pluit – SHIA route. However, in 2015, there was a plan to change the groundplan to now pass Gambir.

SHIA Express Railway will provide stations within the city accessible by roads and other modes of transport as well as adjacent to centers of commercial activities and dense housing complex and connected with MRT Jakarta transportation system and other railway tracks. Stations at the Airport will be located near passenger terminals accessible from train station to departure hall on foot or from the luggage area and arrival hall.

SHIA Express Railway will prioritize comfort with more capacity for passenger baggage, shorten travel time, and ensure greater reliability compared to other means of transport. It will be offered at a competitive price with other modes of transport. The trains will be faster than Commuter Line Trains with fewer stops.


This project is expected to accommodate the access needed from and to SHIA Airport and promote the local and national economy. The economic benefit of this project is to promote commercial and industrial activities along the line as well as provide employement opportunities for the locals.

21. SOEKARNO-HATTA AIRPORT EXPRESS RAILWAY

LATEST UPDATES

Plan to change railway groundplan and project funding scheme had not been determined officially. There are two alternative groundplans, which is to pass Dukuh Atas as per the result of the study conducted by PT Sarana Multi Infrastruktur or to pass Gambir which will go through the existing railway track owned by PT Kereta Api Indonesia. In connection with the determination of groundpland and funding scheme, discussion at the Ministry of Transportation in coordination with related stakeholders was needed.


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IDR 24.5 TrillionPotential use of PPPDKI Jakarta and BantenThe Ministry of Transportation20182022


FUNDING SCHEME

The funding scheme for this project had not yet been determined. However, based on the guidance provided by the Ministry of Transportation, there was a potential use of a PPP scheme. Project preparation using a PPP scheme was awaiting confirmation from the Ministry of Transportation.

Discussion concerning potential implementation of PPP scheme was also needed by the Ministry of Transportation. KPPIP’s PMO intended to support the Ministry of Transportation to prepare itself as the Government Contracting Agency if a PPP scheme was selected.

PT SMI had previously prepared documents on the pre-feasibility study that had been approved by the Directorate General of the Ministry of Transportation in September 2014. However, these documents needed to be revised by taking account of the current condition of transportation. The facilitation provided by PT SMI was discontinued in October 2015 and project preparation has been done by the Ministry of Transportation ever since.


Potential assignment of SOE N/A N/A N/A


Perda DKI Jakarta No. 1 of 2014 (Halim - Palmerah-SHIA

corri-dor);Perda DKI Jakarta No. 1 of

2012 (SHIA-Manggarai route)

Pre-Feasibility Study has been completed and made

official in 2014, yet data update is needed to continue

the project

Predicted to start in Quarter I of 2017 Predicted to start in Quarter II of 2017


Predicted to start inQuarter IV of 2017

Predicted to start in Quarter I of 2018 Not needed Determination of Location had

yet to be issued



Predicted to start in April 2018 Predicted to start in May 2018 Predicted to complete in March 2022


LAND PROCUREMENT

The SHIA route passing Dukuh Atas will need 84.68 ha of land where most of it belongs to the Indonesian Government. Land owned by private party registered at the Ministry of Agrarian Affairs and Spatial Planning was estimated to be 5.2 km in length or 13.09 ha in area. The total land needed represents the minimum land needed for the route of this project development. Dukuh Atas and Manggarai stations will not require land owned by the private party.

The land needed for three other stations (Pluit, Tanah Abang and Halim) is estimated to be 16.86 ha in area. It is important to bear in mind that there is residential area of 7.2 ha for the development of Halim Station and 0.3 ha for Tanah Abang Station that is not registered with the Ministry of Agrarian Affairs and Spatial Planning. The total estimate of non-government land and land and private residences was ~IDR 2.3 Trillion.

Further information concerning study on land procurement planning was still needed in connection with the land needed for the alternative route via Gambir which will use the existing railway track owned by PT Kereta Api Indonesia.

FOLLOW-UPS

1. Coordination between the Minsitry of Transportation and PT SMI in revision to project Feasibility Study.

2. Determination of project’s groundplan.3. Determination of project’s funding scheme.


PROJECT PROFILE

Makassar – Pare Pare Railway project is 144 km in length and part of Trans Sulawesi railway network which will connect the whole island of Sulawesi.


This project is a railway facility in South Sulawesi which can serve as transportation facilities that can accommodate demand on passenger and freight transport. The railway line will connect ports in Parepare and in Makassar.

LATEST UPDATES

Construction has started and 16.1 km had been completed. The target of works on Km 73 (around Mandale) – Km 119 (Palanro), which is 46 Km long and spends IDR 2T, will bein 2018. Tender for the contractor to do the works on the development of a 44-km line in Kabupaten Barru to northern area has been conducted. This line was expected to operate in 2018.

22. MAKASSAR-PARE PARE RAILWAY


::::::

IDR 8.25 TrillionState BudgetSouth Sulawesi The Ministry of Transportation20152018


LAND PROCUREMENT

Under the letter of the Secretary of DJKA of the Ministry of Transportation to the President Director of LMAN, funds needed for KA Makassar-Parepare in 2017 were IDR 1,149.5 Billion of the initial total of IDR 2,200 Billion.

FUNDING SCHEME

Based on the letter of the Minister of Transportation concerning the proposal to revise the indicative ceiling in the 2018 Work Plan and Budget (RKA) of the Ministry of Transportation, the ceiling for KA Makassar - Parepare in 2018 was proposed to be 0 which was initially 1.5 T. This revision was related to the plan to change the scheme of this project development to PPP. This revision was still a proposal and needed re-confirmation. Funds from Government Islamic Securities (SBSN) allocated for KA Makassar Parepare were IDR 1.4 T of the total IDR 2 T in 2017. As a result, there should be an allocation of ceiling amounting to IDR 600 Billion in 2018.

Regarding the proposal to use a PPP scheme for project development, KPPIP proposed to include construction works and land procurement that had been completed or were being done using funds from SBSN and LMAN within PPP’s bundling project regarded as one form of Government support. Construction works to be completed using more or less IDR 2 T of SBSN’s funds are for 51 Km with an additional of 400 m were still being applied for. LMAN’s funds spent on land procurement were IDR 1.6 T.

FOLLOW-UPS

1. Completion of the construction for railway line Stage I.2. Allocation of budget that meet the target need for construction and land procurement in State

Budget of the Minitry of Transportation.


State Budget andRegional Budget N/A N/A N/A




Completed Completed Not needed Determination of Locationhad been issued



N/A 2015-2019 Several lines are predicted to start its operation in 2018


PROJECT PROFILE

East Kalimantan Railway is a 203-km single track railway development project supported by infrastructure such as stations, jetties for coal, ports, and PLTU with a capacity of 15 MW. PT Kereta Api Borneo (KAB) will manage this project. This project will pass Kabupaten Kutai Barat, Kabupaten Paser, Kabupaten Penajam Paser and the City of Balikpapan.


This project is aimed at reducing distribution costs and travel time which can increase production capacity of mining companies. In order to increase the feasibility of the project, PT Kereta Api Borneo as the investor has applied for a change of status from special train to public train which will enable PT Kereta Api Borneo to carry passengers and non-affiliated goods such as crude palm oil and timber.

LATEST UPDATES

The project was awaiting decision from PT Kereta Api Borneo (PT KAB) on type of railway operation between special or public train. The decision about the type of railway operation was necessary considering that PT KAB is planning to carry passengers and non-affiliated goods which can make the project more financially feasible. In connection with this matter, a meeting with PT KAB as the initiator of the project was held on 20 February 2017 to discuss KPPIP’s response to letter No. KAB- 9800/20170119 regarding Legal Constraints (Hambatan-Hambatan Kerangka Hukum). A letter containing regulatory constraints faced by the project was submitted by KPPIP on 16 March 2017 to PT KAB.

PT KAB has obtained recommendations for transfer permits for more or less 200 ha land in Buluminung in Kabupaten Penajam Paser Utara (PPU) for infrastructure development of KA, namely special terminal and technopark. PT KAB has also obtained environmental license for ports and industrial zones on the south railway track. The land owned by PT KAB is around 71.84 hectare in area.

23. EAST KALIMANTAN RAILWAY


::::::

IDR 53.3 TrillionPrivateEast Kalimantan PT Kereta Api Borneo20172021


LAND PROCUREMENT

Land procurement is divided into two regions, forest and non-forest. For the forest area borrow-to-use Permit for Forest Area (IPPKH) for Survey and Exploration of Railway Line No. 41/IPPKH/PMA/2015 on 19 March 2015 from the Head of the Investment Coordinating Board (BKPM) was obtained on behalf of the Ministry of Environment and Forestry. A non-forest permit was obtained from the owner who is a business entity and whose land is on the railway crossing.

FUNDING SCHEME

This project is fully financed by Private, namely PT KAB, which is a subsdiary of Russian Railways. PT KAB was planning to form a consortium to raise funding for the continuity of the project.

FOLLOW-UPS

Decision on the change of its status from special to public so that the train could be used to transport other commodities with long-term commitment on tariff/service fee payment.


Private N/A N/A N/A




Predicted to start inQuarter II 2017

Predicted to start inQuarter III 2017 Completed in March 2015 Determination of Location

had been issued



N/A Predicted to start in 2017 Predicted to complete in 2021


PROJECT PROFILE

The development of Light Rail Transit (LRT) in Palembang, South Sumatera is aimed at supporting the provision of mass public transportation. LRT’s cross service starts from the station at Sultan Mahmud Badaruddin II International Airport to Jakabaring Sport City. The LRT is expected to start its operation in August 2018 to support the Asian Games 2018 sporting event.


Palembang is one of the large rapidly-growing cities in Indonesia. Mass public transportation is needed as a preventive effort to predict the increase in traffic volume in Palembang.

LATEST UPDATES

Based on the result of a coordination meeting by the Coordinating Minister of Economic Affairs, it was decided that LRT would use electric power (third rail) and narrow gauge. Presidential Regulation No. 55 of 2016 on Amendment to Presidential Regulation No. 116 of 2015 on Acceleration in Light Rail Transit Railway Operation in South Sumatera was issued. This revision includes additional scope of work for PT Waskita Karya, that is the development of depots and reimbursement mechanism as well as assignment of PT Kereta Api Indonesia for the running of the facility, operation and maintenance, and operation of automatic ticketing system.

Technical specifications have been issued by the Ministry of Transportation. A Cooperation Contract between the Ministry of Transportation and PT Waskita Karya was signed in June 2016. The Cooperation Contract came into effect considering that the payment has been approved to be made by the Ministry of Transportation using the State Budget of the Ministry of Transportation. Considering the design and build scheme of the project, payment will be made periodically for parts that are already ready for construction.

As of 30 June 2017, construction had reached 45%.

24. SOUTH SUMATERA LIGHT RAIL TRANSIT


::::::

IDR 12.5 TrillionAssignment of SOE South Sumatera The Ministry of Transportation 20152018


LAND PROCUREMENT

Land needed for this project belongs to the Provincial Government of South Sumatera and Angkasa Pura II including land for public use.

FUNDING SCHEME

The scheme adopted for the development of LRT project was assignment of PT Waskita Karya under the issuance of Presidential Regulation No. 116 of 2015 j.o. Presidential Regulation No. 55 of 2016.

FOLLOW-UPS

1. Completion of infrastructure operation by PT Waskita Karya.2. Procurement of facility by PT KAI.




Had been specified Completed CompletedPartially completed (DED has yet to be approved by the Ministry of

Transportation)


Completed in 2013 Completed Not needed Determination of Locationhad been issued



N/A Quarer III 2015-Quarter III 2018 Expected to complete in June 2018


PROJECT PROFILE

The development of LRT has six routes: (1) Cawang – Cibubur, (2) Cawang – Kuningan – Dukuh Atas, (3) Cawang – Bekasi Timur, (4) Dukuh Atas – Senayan, (5) Cibubur – Bogor, and (6) Palmerah – Bogor. This LRT is expected to start its operation in 2018 at the same time as Asian Games 2018 sporting event which will be held in Jakarta and Palembang.


As an effort to reduce traffic congestion in DKI Jakarta, the development of LRT is needed to provide public transportation facility for the public to cut down the use of private vehicles.

LATEST UPDATES

Presidential Regulation No. 49 of 2017 on Second Amendment to Presidential Regulation No. 98 of 2015 on Operation of Light Rail Transit Railway in Jabodebek was issued. The revision governed was related to the scheme and project source of funding as well as the payment mechanism for infrastructure delivery. As of 1-3 May 2017, construction of cross service had reached 13.2%. Cooperation contract between the Ministry Transportation and PT Adhi Karya was signed on 10 February 2017; however, the contract had not taken effect because the payment mechanism for infrastructure operation had not been regulated. In connection with this matter, KPPIP formulated recommendations on an alternative funding scheme which was discussed with related stakeholders especially the Ministry of Finance. The Minister of Transportation would later determine payment mechanism so that cooperation contract can come into effect.

25. JAKARTA, BOGOR, DEPOK AND BEKASI LIGHT RAIL TRANSIT


:::: ::

IDR 23 TrillionAssignment of SOEDKI Jakarta and West Java The Ministry of Transportation 20152019


LAND PROCUREMENT

This project utilizes public space. Principle License by the Governor of DKI Jakarta for cross service 1-3 had been issued.

FUNDING SCHEME

The scheme adopted for the development of this LRT is assignment of PT Adhi Karya under the issuance of Presidential Regulation No. 98 of 2015 j.o. Presidential Regulation No. 65 of 2016 j.o. Presidential Regulation No. 49 of 2017. Concerning the source and funding scheme of PT Adhi Karya’s assignment, the Government was studying several sources of funding and payment mechanisms to reduce the burden of the Government in allocating it in State Budget.

FOLLOW-UPS

1. Determination of source of funding and payment mechanism for infrastructure operation by PT Adhi Karya.

2. Cooperation Contract on infrastructure operation between the Ministry of Transportation and PT Adhi Karya coming into effect.

3. Determination of groundplan for cross service 4 (Dukuh Atas – Palmerah – Senayan), cross service 5 (Cibubur – Bogor) and cross service 6 (Palmerah – Grogol).




Had been specified Completed CompletedPartially completed (DED had not been approved by the Ministry of

Transportation)


Cross service 1-3: Completed

Cross service 1-3: Completed

Cross service 3 likely to be revised

Not needed Determination of Locationhad been issued



N/A Quarter III 2015 – Quarter I 2019 Predicted to complete in Quarter II 2019


PROJECT PROFILE

The development of port in Kuala Tanjung as an international hub port is intended to make it an entrance to the western part of Indonesia. Based on the result of the study conducted by the Ministry of Transportation in 2015, the development of the port will increase the volume of container transported up to 12.4 million TEUs in 2039.

Increase in the volume of container transported comes from the demand from Special Economic Zone (SEZ) Sei Mangkei to the Province of Jambi and assumed that there will be an additional demand from four competitors, namely Port of Singapore, Port of Tanjung Pelepas, Port Klang, and Penang Port.


Indonesia, by having this international hub, expects to enjoy some of the demand that has privileged Singapore and Malaysia all these years. Based on Kuala Tanjung Port Plan 2012, the development of this port will accommodate cargoes to support the development of Sei Mangkei Special Economic Zone (SEZ) and Belawan Port.

LATEST UPDATES

KPPIP completed drawing up an Outline Business Case (OBC) aimed at fulfilling the criteria and depth of study acceptable to the market and to provide recommendations for the development of the surrounding area where the hub port is located. The result of the OBC was distributed to the stakeholders of Kuala Tanjung International Hub port to get input.

Based on the result of OBC, Kuala Tanjung port was proposed to be developed under landlord or bundling scheme of the development coordinator of the area port, port terminals and industrial zones with Government support in terms of land procurement. Landlord/bundling concept was recommended in order to increase its commercial value that can attract participation of private in the project.

Access road to Kuala Tanjung Port developed by PT Pelindo I can start considering that a meeting of minds has been reached concerning the use of land and roads.

26. KUALA TANJUNG INTERNATIONAL HUB PORT


::::::

IDR 30 TrillionPotential Use of PPPNorth Sumatera The Ministry of Transportation 20192021


LAND PROCUREMENT

Based on OBC results, it was estimated that land procurement would need IDR 14.1 Trillion for 5,123 ha. Under the PPP scheme, Government’s portion will be 3,000 ha and Business Entity would have 2,123 ha.

FUNDING SCHEME

The OBC that has been drawn up recommends Kuala Tanjung International Hub Port to adopt bundling scheme between the operation of the port and industrial zone to increase its attractiveness for Business Entity. On the other hand, guidance from the President is for the project to be carried out under assignment to PT Pelindo I in cooperation with Dubai Port and Port of Rotterdam. This project funding scheme was to be determined at the KPPIP’s Committee Meeting.

FOLLOW-UPS

1. Determination and approval for funding scheme organized by KPPIP.2. The Ministry of Transportation to correspond with the Ministry of Finance concerning application

for Project Development Facility (PDF) aimed at drawing up Financial Business Case (FBC) if the scheme selected is PPP.

3. Improvement to policy in port concerning synchronization of Belawan Port, Tanjung Sauh (Batam) Port as well as the effective implementation of cabotage system.


Potential use of PPP N/A N/A N/A


Had been specified Completed in December 2016

Expected to start in Quarter III 2017 Expected to start in 2018


Expected to start in Quarter IV 2017

Expected to start in Quarter IV 2017 N/A Determination of Location has yet to

be issued



N/A Expected to start in Quarter III 2019 Expected to start its operation in 2021


PROJECT PROFILE

This port was selected as International Hub Port in the Eastern Indonesia considering:1. Growth in the Eastern Region of Indonesia is likely to be higher than that in the Western Part of

Indonesia; 2. The dynamic of logistics in the Eastern Indonesia is expected to grow exponentionally.


This port will support the development of Bitung Special Economic Zone (SEZ) which is declared as one of the Regional Government’s projects. In addition, Bitung International Hub Port will also support activities in the eastern part of Indonesia covering Ambon and Ternata (agriculture, industry and mining) and Samarinda, Balikpapan, Tarakan and Nunukan (coal, crude oil and plywood).

LATEST UPDATES

The Ministry of Transportation’s plan was for PT Pelindo IV to develop the capacity of the existing port. If capacity development was needed, the port area would be expanded to Bitung Special Economic Zone and Pulau Lembeh. In connection with this matter, the Ministry of Transportation is conducting Design Assessment (SID) to identify the feasibility of port development in Bitung SEZ.

KPPIP provides facility for Consultation Services to draw up OBC for this project. KPPIP has gone through bidding for consutation services to draw up OBC for Bitung International Hub Port and the winning bidder is PT Mott MacDonald Indonesia, PT Deloitte Konsultan Indonesia, and PT Hanafiah Ponggawa & Partners as the service providers of drawing up OBC for the development of Bitung International Hub Port. The kick off meeting for OBC Design for Bitung International Port Hub has been held, and the team of consultants for OBC has surveyed Bitung Port area.

Based on the guidance provided by the Minister of Transportation, part of the project construction will be assigned to PT Pelindo IV.

27. BITUNG INTERNATIONAL HUB PORT


::::::

Estimate IDR 34 TrillionPotential use of PPPNorth Sulawesi The Ministry of Transportation20202022


LAND PROCUREMENT

To date, land procurement has not yet started and is awaiting the completion of the study.

FUNDING SCHEME

This project has the potential use of PPP scheme. The role of the government and private will be determined after the study is completed.

FOLLOW-UPS

1. Expediting the study on determining development scheme for Bitung International Hub Port. 2. Preparing masterplan as a strategic reference for future regional development.


Potential use of PPP N/A N/A N/A


Had been specified At bidding for consultation services for OBC

Predicted to start in Quarter I 2018 Predicted to start in Quarter II 2018


Predicted to start in Quarter III 2017

Predicted to start in Quarter IV 2017 Not needed N/A Determination of Location

has been issued



N/A Predicted to start in 2020 Predicted to start its operation in 2022


PROJECT PROFILE

This project has a container terminal with an estimated capacity of 7.5 million TEU. Capacity estimation considered the potential growth in demand in the eastern part of West Java.


This port was developed as part of the Government’s strategy to reduce excess capacity in Tanjung Priok Port. Port Patimban is expected to be a stimulus for regional development in Subang.

LATEST UPDATES

The project was planned to be financed using foreign loan and loan provided by the Japanese government. For the purpose of the loan agreement, a study on EIA and Land Procurement Planning documents are needed as requirements. The EIA study, Port Master pLan, Land Procurement Planning Documents, and Bacis Design had been prepared. The Ministry of National Development Planning/National Development Planning Agency was trying to include Patimban Port in Green Book.

In connection with the drawing up of EIA study, KPPIP successfully supported the effort to coordinate and review the substance of the study and to make sure that it met the prerequisite for issuance of an Environmental License. As a result, the Environmental License was issued within two months, which was on 28 February 2017. The Ministry of Transportation then coordinated conformity of spatial planning at provincial level. This effort resulted in the Determination of Location by the Governor of West Java which was issued on 13 April 2017.

KPPIP also submitted the legal review of procurement mechanism for the Port Business Entity including recommendations based on analysis of laws and regulations to the Ministry of Transportation.

28. PATIMBAN PORT


::::::

IDR 43.2 TrillionState Budget, Foreign Loan, Regional Budget, and Private West Java The Ministry of Transportation 20182019 (Stage 1)


LAND PROCUREMENT

The Ministry of Transportation had finished drawing up Land Procurement Planning Documents in November 2016. The project needs 372.02 ha for port supporting area and 15.79 ha for access road. Determination of Location was issued by the Governor of West Java on 13 April 2017.

FUNDING SCHEME

Funding scheme for Stage 1 will spend State Budget with foreign loan (ODS Loan). Stage 2 and 3 are likely to use PPP scheme. In connection with construction Stage 1, MoU with the Japanese Government will be signed after the pledge for ODA loan.

FOLLOW-UPS

1. Loan Agreement on ODA loan.2. Bidding process for Port Business Entity.


Stage 1: State Budget with foreign loan

Stage 2 and 3: PPP and Private

N/A N/A N/A


In progress September 2015 Completed in December 2015 Being drawn up


Completed in February 2017 Completed in February 2017 N/A Determination of Location has been issued



N/A Predicted to start in January 2018 Predicted to complete in July 2019(stage 1)


PROJECT PROFILE

The development of Inland Waterways/CBL is aimed at optimizing the potential of the potential of river channel as alternative logictic transportation. This optimization will connect the off-the-road area of Tanjung Priok Port and the hinterland area.

In Stage 1, the channel transportation sytem will use the existing channel, which is Cikarang – Bekasi – Sea passing Marunda, North Jakarta, built by the Ministry of Public Works and Public Housing. For stage 2, PT Pelindo II plans to add a channel route from Tanjung Priok to Cikampek and this channel will connect the logistic flow from Tanjung Priok to Cibitung-Cikarng industrial zone in Bekasi and Cikampek, Karawang.


The development of Inland Waterways/CBL is expected to reduce the volume of logistics using the overland route from Cikarang and Karawang industrial zones to Tanjung Priok Port.

LATEST UPDATES

A Draft Presidential Regulation on assignment and land procurement to PT Pelindo II (Persero) was submitted to the Ministry of SOE and first discussion was conducted at the Coordinating Minister of Ecnomic Affairs. The Feasibility study, Initial Environmental Baseline, and SID Survey were completed by PT Pelindo II (Persero). The Study on analysis and assistance with Balai Besar Wilayah Sungai Ciliwung Cisadane to obtain technical recommendations for the development of CBL terminal was completed. Revision to RIP Tanjung Priok was being finalized at Tanjung Priok Port Authority.

PT Pelindo II was preparing a revision to the project feasibility study on timeline and critical path project development.

29. INLAND WATERWAYS/CIKARANG-BEKASI-LAUT


::::::

IDR 3.4 TrillionPotential assignment of SOE DKI Jakarta and West JavaPT Pelindo II (has yet to be determined)20182021


LAND PROCUREMENT

This project development is divided into two stages. The first stage is the development of a 40-km channel from Tanjung Priok to CIkarang Industrial Zone by utilizing channel built by the Ministry of Public Works and Public Housing. Land procurement is not needed for this project, yet channel dredging and renovation to crossing bridges are necessary.

The second stage, which is an additional of 42-km channel route from Tanjung Priok to Cikampek needs 300 ha of land planned to be used for the development of barge dock. Based on the result of site visit, the area planned for barge dock was determined to be owned by the locals and housing developers.

FUNDING SCHEME

This project is to be financed using PT Pelindo II’s internal budget and official assignment of PT Pelindo II or use of PPP scheme is also planned.

FOLLOW-UPS

Completion of revised feasibility study by PT Pelindo II concerning certainty over timeline and critical path of project development.


Potential assignment of SOE N/A N/A N/A


Had been specified except for Kabupaten Bekasi Completed in February 2015 Completed in June 2016 Expected to start in May 2017


Expected to startin July 2017

Expected to startin July 2017 Not needed Determination of Location

had yet to be issued



N/A Expected to start in January 2018 Expected to start its operation in 2021


PROJECT PROFILE

Palapa Ring Broadband is a development of an optic fibre network in 57 kabupaten (districts)/cities located in remote areas with difficult geographical features and a relatively small number of potential users to create the backbone of the national telecommunication system reaching all 514 districts/cities.


Provision of optic fibre network is aimed at developing one of Government’s efforts to reach the target of the 2015-2019 National Medium-Term Development Plan (RPJMN) by providing quality broadband access acroos Indonesia. It is expected that a better communication access provided for this project will create more equal distribution and easier telecommunication-information access, open internet-based (e-commerce) business and employment opportunities, increase efficiency and effectiveness of the work system, and promote competence to compete in global markets.

LATEST UPDATES

This project has obtained approval for a guarantee from IIGF and will use availability payments as its funding scheme for the West Package, Central Package, and East Package for 15 years. The funds for availability payments will be provided by PNBP USO from House of Rural Telecommunicaation and Information Technology (BP3TI).

The Executing Business Agency for West Package and Central Package has been determined and it was decided that West Package will work with PT Palapa, while West Ring and Central Pacakge will work with PT Len Telekomunikasi Indonesia. Procurement for the East Package was completed and PT Palapa Timur Telematika, which is a consortium of Moratel – IBS – Smart Telecom, won the tender.

30. PALAPA RING BROADBAND

Investment ValueFunding SchemeLocation Implementing AgencyTarget Construction Date

Commercial Operation Date

:::::

:

IDR 5.13 TrillionPublic-Private Partnership (PPP)Across IndonesiaThe Ministry of Communication and InformaticsWest and Central Packages in Quarter 1 2016 and East Package in Quarter 1 2017West Package in Quarter 1, Central Package in Quarter 1 2018, East Package in Quarter 4 in 2018


The Ministry of Communication and Informatics as the GCA was focusing on procurement of Project Management Unit (PMU) who will assist GCA in monitoring project delivery.

Concerning the Central Package, some studies still needed to be completed such as the study on clearance of sea mines and change of route via north lane of Taman Laut Nasional Bunaken. For further study, House of Rural Telecommunicaation and Information Technology (BP3TI) was to work with the Indonesian Marine Force (TNI AL) to complete information on the location of sea mine in Wawonii Strait as well as data on methodology, estimated time and costs needed for the strait.

FUNDING SCHEME

The Palapa Ring project adopted a Public-Private Partnership (PPP) scheme where the Ministry of Communication and Informatics would act as the Government Contracting Agency. In addition, this project also obtained a loan from PT Penjaminan Infrastruktur Indonesia and feasibility support in the form of availability payments.


Completed

West Package and Central Package in July 2015

East Package in January 2016

West Package and Central Package in March 2016

East Package in February 2017.

West Package and Central Package in March 2016

East Package in February 2017


Completed Completed Completed Completed


Not needed Not needed Not needed Not needed



West Package in August 2016.

Central Package in September 2016.

East Package in March 2017.

West Pacakge in August 2016.

Central Package in September 2016.

East Package in March 2017.

West Package and Central Package in Quarter 2018

East Package in Quarter 4 2018.


LAND PROCUREMENT

The East Package encountered obstacles in land procurement in areas that do not belong to Regional Office (Kanwil) of National Development Agency. In order to overcome this issue, the Ministry of Communication and Informatics as the GCA made some introductions to the community affected by the development.

FOLLOW-UPS

Monitoring of procurement process for Project Management Unit of Palapa Ring.

National Strategic Projects (PSN)

CHAPTER V


In order to promote economic growth by developing infrastructure in Indonesia, the Government has taken effort to accelerate projects considered strategic and extremely urgent to be realized within a relatively short time. In this effort, the Government through the Coordinating Ministry of Economic Affairs initiates the creation of mechanism for acceleration of infrastructure provision and issuance of relevant regulations as legal protection governing it.

Using the mechanism, KPPIP makes selection and list of projects considered strategic and very urgent, and provide facilities for easier project implementation. These facilities are expected to be able to realize strategic projects quickly.

Starting mid-2016 until early 2017, evaluation and selection of strategic projects and the acceleration mechanism of their development have been conducted. The evaluation result and selection contained in Presidential Regulation No. 58 of the Year 2017 on the Amendment to Presidential Regulation No. 3 of the Year 2016 on Acceleration of National Strategic Projects.


Evaluation and selection of PSN by KPPIP started in August 2016 and completed at KPPIP’s Ministerial Meeting on 10 February 2017. The results of the process have been reported to the President in April 2017. The results of evaluation and selection of PSN are as follows.

Evaluation and Selection of National Strategic Projects (PSN) A.

No Project Name Investment Value(IDR Billion)

1 Gempol – Pandaan Toll Road (14km) 1,470

2 Sentani Airport, Jayapura 1,471

3 Juwata Airport, Tarakan 1,391

4 Fatmwati Soekarno Airport, Bengkulu 1,671

5 Mutiara Airport, Palu 1,391

6 Mataharo Airport, Wakatobi 662

7 Labuan Bajo Airport, Pulau Komodo 662

8 SOekarno Hatta Airport Development (Including Terminal 3) 4,700

9 Kalibaru Port 12,000

10 Belawan – Sei Mengkei Gas Pipe with a capacity of 75 mmscfd 1,215

11 PLBN & SP Entikong, Kab. Sanggau, West Kalimantan 152

12 PLBN & SP Mota’an, Kab. Belu, NTT 82

13 PLBN & SP Motamassin, Kab. Malaka, NTT 128

SUMATERA KALIMANTAN MALUKU & PAPUASULAWESI

BALI & NUSA TENGGARA

JAWA

4 22

4

2PROYEK PROYEK

PROYEK

2PROYEK

PROYEK

PROYEK15

16

4

3

5

14

17

9

181

19

2

6

20

7 13 12

11

10

8


No Sector Project Name Main Reason for Elimination Value (IDR Billion)

1 Airport South Banten Airport, Panimbang No champion Not yet known

2 Airport Karawang Airport No champion 37,500

3 Airport HAS Hanadjoedin Airport, Tanjung Pan-dan No champion 783

4 Dam Long Sempajong Dam Construction does not start in 2018 Not yet known

5 Dam Loea Dam Construction does not start in 2018 Not yet known

6 Dam Bonehulu Dam Construction does not start in 2018 Not yet known

7 Dam Segalamider Dam No champion Not yet known

8 Energy LPG Banten Terminal No champion Not yet known

9 Energy Mini LNG Refinery in Java No champion 43

10 Toll Road Sunter – Rawa Buaya – Batu Ceper Toll Road Duplicate of other PSN Not yet known

11 Port Wayabula Port No champion 70

12 Port Parigi Port No champion 2

13 Agriculture & Maritime

Food Estate No clear output Not yet known


Development of Pulau Karantina in Pulau Nanduk, Bangka Belitung

No champion 2


Development of Integrated Freezer Ware-house to implement Cold Chain System in 20 locations

No clear output 96

No Project Name Investment Value(IDR Billion)

14 PLBN & SP Skouw, Jayapura, Papua 166

15 Paya Seunara Dam, Sabang, NAD 57

16 Rajui Dam, Pidie, NAD 138

17 Jatigede Dam, Sumadeang, West Java 4,825

18 Bajulmati, Port, Banyuwangi, East Java 454

19 Nipah Port, Madura, East Java 213

20 Titab Port, Kab. Buleleng, Bali 496

There are 20 national strategic projects that have been completed covering 6 sectors with a total value of IDR 33.5 Trillion

Image 5.1

15 national strategic projects were eliminated for not meeting PSN’s criteria

Tabel 5.1


...and covers 10 sectors

ENERGY

8PROJECT

ROAD

24PROJECT

DAM

4PROJECT

ZONE

5PROJECT

RAILWAY

4PROJECT

AGRICULTURE/ MARITIME

1PROJECT

AVIATIONINDUSTRY

1PROGRAM

AIRPORT

1PROJECT

TECHNOLOGY

1PROJECT

IRRIGATION

7PROJECT



JAWA

22 43

3

3PROYEK PROYEK

PROYEK

16PROYEK

PROYEK

PROYEK

1 PROYEKINDONESIA TIMURNASIONAL

12

PROGRAMPROYEK

After selection process, 55 projects and 1 program meet PSN criteria and approved at KPPIP’s Ministerial Level to be included in list of PSN.

Image 5.2


This project covers 15 project sectors and 2 program sectors

1PROGRAM

1PROGRAM

12PROJECT

74PROJECT

30PROJECT

23PROJECT

10PROJECT

54PROJECT

3PROJECT

1PROJECT

9PROJECT

8PROJECT

6PROJECT

6PROJECT

4PROJECT

3PROJECT

1PROJECT

Project Program

245 projects and 2 programs, 17 of which are declared to have met the criteria as national strategic projects and provided as Attachment to Presidential Regulation No. 58 of the Year 2017 on amendment to Presidential Regulation No. 3 of the Year 2016 on Acceleration of National Strategic Project

Image 5.3

IDR 11 T

IDR 1,065T



JAWA

61 43

3

3PROYEK PROYEK

PROYEK

16PROYEK

PROYEK

PROYEK

NASIONAL2

12PROGRAMPROYEK

IDR 638 T IDR 564 T IDR 444 TIDR 155T

ROAD

WATERRESOURCES

PORT

DAM

AIRPORT

BORDERLINE

ZONE

IRRIGATION

SEA WALL

RAILWAY

SMELTER

HOUSING

ENERGY ELECTRICITY

TECHNOLOGY AVIATIONINDUSTRI

AGRICULTURE/MARITIME


35,7GW

39%

16%

20%

23%

2%

Throughout the first semester of 2017, KPPIP has evaluated and monitored the progress of 245 projects and 2 PSN projects. In terms of the progress of project development, 5 projects have been completed, 130 projects had entered implementation stage meaning that construction stage has started, 12 projects were at transaction stage, and 100 projects were still at preparation stage.

Current Status of National Strategic Projects (PSN)B.

On the other hand, for electricity program (35,000 MW Program) until June 2017, 734 MW are already in operation, 13.816 MW are at construction stage, 8.210 MW have Power Purchase Agreement with PT PLN but have not reached financial close, 5.845 MW are in procurement stage, and 7,212 MW are at planning stage.

743 MW are in operation

13,816 MW are at construction stage

8,210 MW have completed PPA but not yet financial close

5,845 MW are at procurement stage

7,212 MW are at planning stage

5 projects have been completed

130 projects are at construction stage1

12 projects are at transaction stage

100 projects are at preparation stage

including 1 Electricity Program categorized into construction stage (39% Electricity Program has reached construction per April 2017)

1

245+2PSN

40%53%

5%

2%

Progress of 245 Projects + 2 Programmsas of June 2017

Progress of Electricity Program asof April 2017


For the total 245 projects and 2 programs included in PSN (National Strategic Projects) list, a total financing estimate amounting to Rp 4.197 Trillion is required; Rp 525 Trillion from the State Budget, Rp 1.258 Trillion from SOE/RGOE, and Rp 2.414 Trillion Private’s contribution.

The above-mentioned achievement is still considered to be on target and all projects are expected to start their operation according to the target schedule for Commercial Operation Date.

In order to support the monitoring of National Strategic Project, KPPIP has prepared dashboard for Information Technology system for PSN monitoring. The dashboard will serve as database for all information concerning PSN such as project profile and latest development. The dashboard of the Information Technology system is currently being refined in terms of its application, security, and maintenance to be readily used online by all implementing agencies in July 2017. The maintenance is carried out by the IT Team of Consultants and IT Team of the Executive Office of the President.

Until June 2017, the data collected for 245 projects and 2 programms included in the list of National Strategic Projects are as follows:

• Investment value is available for 193 projects • The Implementing Agency is available for 242 projects • The coordinate of the location is available for 150 projects • Construction plan for 190 projects • Construction plan is available for 233 projects • Detailed funding for 61 projects • LATEST UPDATES for 230 projects• Project issues for 175 projects • Implementation schedule for 40 projects

KPPIP’s Information Technology (IT) SystemC.

Policies on Infrastructure Supported by KPPIP

CHAPTER VI


Amendments to Regulations that have made Progress in Infrastructure Delivery

A.

1A. Amendment to Regulation on Intersectoral concerning

Infrastructure Delivery

This chapter covers elucidation on results of identification and analysis of the existing laws and regulations that can be adjusted to the agenda of policy on infrastructure acceleration including laws and regulations required to promote the acceleration of Priority Projects and National Strategic Projects (“PSN”). This chapter also describes the agenda of policy on infrastructure according to the mandate of the President of the Republic of Indonesia. The description will be divided into 2 (two) sections, namely: (i) Amendment to regulations which have contributed progress in infrastructure delivery and (ii) Amendment to regulation required for the acceleration of infrastructure delivery.

Based on the results of identification and analysis of KPPIP, several intersectoral laws and regulations have been amended to promote the acceleration of Priority Projects and PSN. This amendment is not only in terms of laws but also in technical regulations, as follows:


In order to promote acceleration of infrastructure development, the Government has issued Government Regulation Number 13 of the Year 2017 (“PP 13/2017”), which is an amendment to the Government Regulation Number 26 of the Year 2008 on National Spatial Planning.

Amendments to provisions governed in Government Regulation (PP) 13/2017 are as follows:

a. Change of strategy to improve access to urban services and centres of regional economic growth and strategy to increase quality and range of infrastructure network range;

b. Change of scope of policy and development strategies of spatial arrangement;c. The authority of the Minister of Agrarian Affairs and Spatial Planning/Head of National Land

Agency to provide recommendations on spatial utilization for the purpose of giving borrow-to-use permit if the plan for spatial utilization activity having national strategic value and/or great impact is not yet specified in regional regulation on spatial plan of the province or district/city.

Government Regulation (PP) 13/2017 issued to regulate discretion that can be exercised by the Minister of Agrarian Affairs and Spatial Planning/Head of National Land Agency is expected to resolve problems with spatial arrangement that hinder the implementation of infrastructure development.

Amendment to Presidential Regulation on Acceleration of Priority Infrastructure Delivery

Proposal for Draft Amendment to Presidential Regulation Number 75 of the Year 2014 on Acceleration of Priority Infrastructure Delivery (“Perpres 75/2014”) submitted to the President last year has been enacted and promulgated under Presidential Regulation Number 122 of the Year 2016 (“Perpres 122/2106”).

Perpres 122/2016 accommodates the proposal approved at KPPIP’s committee meeting as follows:

a. Expansion of scope of infrastructure that can be proposed to be Priority Project;b. Amendment to KPPIP’s membership structure; and c. Reinforcement of procurement mechanism for goods/services within KPPIP.

Amendment to Government Regulation on National Spatial Planning


Amendment to Presidential Regulation on Acceleration in the Implementation of PSN

In its implementation, PSN encounters several issues about project completion which requires policy designed by the government and adjustment to the arrangement of PSN. KPPIP with relevant stakeholders have conducted discussions on formulating policy and conformity with arrangement of PSN. Matters to which adjustment are made are:

a. Addition of arrangement on projects financed by non-Government budget ( Non-Budget-PINA Infrastructure Financing);

b. Arrangement in renewing determination of location to make land procurement easier; c. Prioritizing the use of domestic goods and/or services to promote the implementation of PSN; d. Monitoring the implementation of PSN by using information technology system used by

KPPIP; and e. Revision to Attachment to PSN list based on the results of evaluation by KPPIP.

Amendment to Presidential Regulation Number 3 of the Year 2016 on Acceleration in the Implementation of National Strategic Project has een issued through Presidential Regulation Number 58 of the Year 2017.

Presidential Regulation on the Management of Social Impact in Land Procurement for National Strategic Projects (PSN)

One of the ways to accelerate the development of PSN is by accelerating procurement of the required land. In its implementation, there are some problems with the land required which is state land controlled by the community and used in good faith for a long period of time. Consequently, the Government needs to manage social impact of solution to this land issue. The Government has issued Presidential Regulation Number 56 of the Year 2017 on the Management of Social Impact for the Purpose of Land Procurement for National Strategic Projects (“Perpres 56/2017”).

Under Perpres 56/2017, the community who has met the criteria and certain requirements are given monetary compensation for: (i) costs of house demolition (ii) mobilization (iii) rent and (iv) compensation for loss of income.


In addition to laying down criteria and requirements for the members of the public deserving of the monetary compensation, other matters governed in Perpres 56/2017, are as follows:

a. Provisions on the preparation of documents on management of social impact by the ministries/government agencies, regional government, state-owned enterprises, or regional government-owned enterprises whose land will be used for the development of PSN;

b. Provisions concerning Tim Terpadu (Integrated Team);c. The authority of the governor to

determine: (i) the list of the locals receiving monetary compensation (ii) amount of monetary compensation and (iii) the mechanism and procedure for giving out monetary compensation based on the recommendation of Integrated Team (Tim Terpadu);

d. Provisions concerning source of fund required in management of social impact;

e. Alternative way of giving out monetary compensation, namely (i) in cash or (ii) banking transaction.

Under Perpres 56/2017, the government can give out monetary compensation for the community meeting the criteria and complying with the previling laws.


The Ministry of Transportation has initiated amendment proposal to Government Regulation Number 56 of the Year 2009 on Railway Operation (“PP 56/2009”) to accommodate direct appointment of the operator in the event that the railway project is fully financed by private including land procurement costs.

The Government has issued an amendment to PP 56/2009, that is Government Regulation Number 6 of the Year 2017 (“PP 6/2017”). PP 6/2017 specifies conditions that business entity running public railway infrastructure must be first determined as public railway operator under certain mechanisms. One of the mechanisms is assignment in the event no business entity is interested in it because it is not financially feasible.

Amendment to Presidential Regulation on Acceleration of LRT Operation inJabodebek

Acceleration in the operation of integrated Light Rail Transit in Jakarta, Bogor, Depok, dandan Bekasi (“LRT Jabodebek”) was initially governed in Presidential Regulation Number 98 of the Year 2015 on Acceleration of Integrated Light Rail Transit Railway Operation in Jakarta, Bogor, Depok, and Bekasi (“Perpres 98/2015”), as amended by Presidential Regulation Number 65 of the Year 2016. Along with the progress of infrastructure development of LRT Jabodebek which is carried out by PT Adhi Karya (Persero) Tbk.

Amendments to Sectoral Regulations

Amendment to Government Regulation on Railway Operation

A2.


(“PT Adhi Karya”), the required financing scheme is available however its stipulations under the Presidential Regulation 98/2015 including its amendment are not available yet.

The Government is planning to provide payment options for infrastructure built by PT Adhi Karya, and one of them is assignment of PT Kereta Api Indonesia (Persero) (“PT KAI”) for payment of facilities built by PT Adhi Karya, which was not initially governed under the Perpres 98/2015 and its amendment.

In order to accommodate the plan, the Government has issued the second amendment to Perpres 98/2015 by the issuance of the Presidential Regulation Number 49 of the Year 2017 (“Perpres 49/2017”). In Perpres 49/2017, there are 2 (two) options for the Government in making payment for the development of LRT Jabodebek facility by PT Adhi Karya, namely: (i) Payment allocated in Expenditure Budget of the Ministry of Transportation, and/or (ii) Payment via PT KAI. In addition, Perpres 49/2017 accommodates support in the form of subsidy/aid and/or fiscal incentive in the implementation of PT KAI’s assginment.

Regulation of the Ministry of


Transportation on Elimination of Requirements for Capital Ownerhsip of Business Entity in the Operation of Sea Transport, Ship Agency, Loading and Unloading and Port Business

On 5 April 2017, the Government promulgated the Regulation of the Minister of Transportation Number PM 24 of the Year 2017 on the Revocation of Requirements for Business Entity’s Capital Ownership in the Operation of Sea Transport, Ship agency, Loading and Unloading and Port Business (“Permenhub 24/2017”). Permenhub 24/2017 was issued for the adjustment to investment provisions on sailing to promote investment and business development.

Permenhub 24/2017 revokes investment provisions in the operation of sea transport, ship agency, loading and unloading and Port Business, in the following regulations:

a. Regulation of the Ministry of Transportation Number 45 of the Year 2015 on Requirements on Business Entity’s Capital Ownership in the Field of Transportation;

b. Regulation of the Ministry of Transportation Number PM 93 of the Year 2013 on the Operation and Management of Sea Transport;

c. Regulation of the Ministry of Transportation Number PM 11 of the Year 2016 on the Operation and Management of Ship Agency;

d. Regulation of the Ministry of Transportation Number PM 146 of the Year 2016 on Amendment to Regulation of the Ministry of Transportation Number PM 51 of the Year 2015 on the Operation of Sea Port; and

e. Regulation of the Ministry of Transportation Number PM 152 of the Year 2016 on the Operation and Management of Loading and Unloading.

As a result, minimum provisions for capital ownership and paid-up capital by business entity running the business in the field of sailing no longer exist. The facility given by the Government is expected to attract more investors in infrastructure in the field of sailing.

Amendment to Presidential Regulation on Acceleration in the Development of Electricity Infrastructure

The acceleration of infrastructure development in electricity has been facilitated under Presidential Regulation Number 4 of the Year 2016 on the Acceleration in Electricity Infrastructure Development (“Perpres 4/2016”). However, in its implementation, acceleration in electricity infrastructure development needs adjustment, in terms of its financing, partnership scheme for delivery of electricity infrastructure development, and increase in domesic content.

During the preparation of this report, KPPIP has played a role in facilitating and coordinating discussion meeting concerning amendment to Perpres 4/2016. KPPIP also promotes the development of electricity infrastructure can involve the role of industry and domestic workers.


The Government has issued amendment to Perpres 4/2016 via Presidential Regulation Number 14 of the Year 2017 on the Amendment to Presidential Regulation Number 4 of the Year 2016 on the Acceleration in Electricity Infrastructure Development (“Perpres 14/2017”). Perpres 14/2017 issued to increase domestic component in the development of electricity infrastructure can be realized in the form of commitment. As a result, PT PLN (Persero), the subsidiary of PT PLN (Persero), and/or Power Plant Developers may cooperate with foreign business entities having the commitment in the development of equipment and electricity components, national human capital, and transfer of technology required in the development of electricity infrastructure.

Amendment to Government Regulation on Returnable Operational Costs and Imposition of Income Tax in Upstream Oil and Gas Business

The Government has issued amendment to Government Regulation Number 79 of the Year 2010 on Returnable Operating Costs and Imposition of Income Tax in Upstream Oil and Gas Business (“PP 79/2010”), namely Government Regulation Number 27 of the Year 2017 (“PP 27/2017”). This amendment is made to increase oil and natural gas reserves and promote investment climate in upstream oil and gas business.

The amendments accommodated in PP 27/2017 include:

a. Elimination of several types of costs that are not returnable in the calculation of profit sharing and Income Tax, namely: (i) cost of environmental and community development during the exploitation, (ii) Transaction that disadvantages the state, and (iii) interest recovery incentives;

b. The number of residual book value of tangible assets can be charged directly if the tangible assets can no longer be used due to damage of natural cause or force majeure;

c. The Ministry of Energy and Mineral Resources can adopt a policy on field development by coordinating with the relevant ministry to secure state revenue;

d. Authority in controlling and supervision of profit sharing calculation is under SKK Migas;

e. Providing facilities for contractors at exploration stage in petroleum operations, such as: (i) exemption of import duty on imported goods used in Petroleum Operations (ii) VAT or


VAT and PPnBM due is not collected;f. Providing facilities for contractors

at exploitation stage including field processing, transportation, storage and sale of its own production as the continuity of upstream oil and gas business activity in petroleum operations, among others are: (i) Exemption of import duty on imported goods used in petroleum operations

(ii) PPh Article 22 is not imposed on imported goods that have been provided with exemption from the said import duty.

The facilities provided for investors or contractors of upstream oil and natural business activity are governed in PP 27/2017, both at exploration and exploitation stage are expected to be able to increase investors’ interest in exploration and exploitation in Indonesia.


On 23 December 2016, the Ministry of Finance has inaugurated State Asset Management Agency (LMAN) (“LMAN”). The establishment of LMAN results in the funding of land procurement especially land procurement for the implementation of PSN being allocated to LMAN. In order to support this function, the Government has previously issued Presidential Regulation Number 102 of the Year 2016 on Land Procurement Funding of development for Public Interest in the Implementation of National Strategic Project.

Under Perpres 102/2016, it is the function of LMAN to exercise the authority of the Minister of Finance to fund land procurement of the development for public interest in the implementation of PSN. As a result, Regulation of the Minstry of Finance to further governs the procedure of LMAN’s duties.

Regulation of the Ministry of Finance Number 21/PMK.06/2017 on the Procedure for Land Procurement for National Strategic Project and Management of Assets Resulting from Land Procurement by State Asset Management Agency (LMAN) (“PMK 21/2017”) has been issued, which among others governs the procedure applied by LMAN in direct payment of monetary compensation fund and of monetary compensation fund sourced from the earlier business entity’s fund as well as procedure for payment application by related Ministries/Government Agencies and business entity.

Amendments to Regulations concerning Infrastructure Funding

Regulation of the Ministry of Finance on Procedure for Land Procurement for PSN by LMAN

A3.


Regulation of the Ministry of Finance on the Procedure for Providing Central Government’s Guarantee for the Acceleration of PSN

In order to support the implementation of PSN, the Government through Presidential Regulation Number 3 of the Year 2016 (“Perpres 3/2016”) in conjunction with Presidential Regulation Number 58 of the Year 2017 on the Acceleration of National Strategic Projects provides facilities in the form of Central Government’s Guarantee for PSN implemented by business entity or regional government working with business entity. As a result, Regulation of the Ministry of Finance is required to govern provisions for granting of the Central Government’s Guarantee.

The Ministry of Finance has issued Regulation of the Ministry of Finance Number 60/ PMK.08/2017 on the Procedure for the Granting of Central Government’s Guarantee for the Acceleration of National Strategic Project (“PMK 60/2017”). Central Government’s Guarantee that can be granted under PMK 60/2017 is limited to political risks that may cause the delayed implementation of National Strtegic Projects (PSN) and create financial impact on business entity implementing PSN under cooperation agreements and/or or other documents treated equal with cooperation agreements.

In addition, PMK 60/2017 which also governs requirements for PSN to be able to obtain Central Government’s Guarantee, the form of the Guarantee, procedure for granting the Guarantee, and application procedure for guarantee.


Amendments to Regulations Needed to Accelerate Infrastructure Delivery

B.

In its implementation, PSN encounters several issues in project completion which requires policy to be formulated by the government and adjustment to arrangement of PSN. KPPIP with related stakeholders have conducted discussions on formulation of policy and adjustment to arrangement of PSN. Matters require adjustment, among others, are:

a. Addition of arrangements for projects financed by non-Government budget (Non-State Budget-PINA Infrastructure Financing);

b. Arrangements for renewal of determination of location for easier land procurement;c. Prioritized use of domestic goods and/or services to support the implementation of PSN;d. Monitoring the implementation of PSN using information technology used by KPPIP; ande. Amendment to Atatchment PSN List based on results of evaluation.

Draft amendment to Presidential Regulation Number 3 of the Year 2016 on the Acceleration in the Implementation of National Strategic Project is now being finalized at the Cabinet Secreatariat and the Ministry of Law and Human Rights.

Amendment to Cross Sectoral Regulations concerning Infrastructure Delivery such as Land Procurement, License Issuance, and others

Amendment to Presidential Regulation on Accelerating the Implementation of PSN

B1.


In order to accelerate the construction and development of oil refinery, the Government has issued Presidential Regulation Number 146 of the Year 2015 on the Construction and Development of Domestic Oil Refinery (“Perpres 146/2015”). Perpres 146/2015 also provides facilities in the form of projec tfunding. Nevertheless, PT Pertamina (Persero) (“Pertamina”) as the implementing agency of several constructions and developments of oil refineries believe that in its implementation, Pertamina has not been able to fully utilize the facilities provided.

Since Pertamina plans to use project financing scheme in financing construction and development of refineries, several amendment proposals were put forward by Pertamina in Draft Amendment to Perpres 146/2015, covering:

a. Pertamina proposes that loan facility from the Government should not be only provided to Pertamina but also to Pertamina’s subsidiary and/or joint ventures formed by Pertamina; and

b. Pertamina proposes that loan facility from the Government can also be provided to the issuance of bonds by Pertamina.

During the reporting period, KPPIP has provided support in the form of facilitation and coordination of discussion meting of amendment to Perpres 146/2015 proposed by Pertamina. Based on the discussion meeting conducted between Pertamina, KPPIP, the Ministry of Finance, and other related parties, further discussions are still needed on the amendment proposal, which will be approved before submitting it to the President.

Promoting Amendments to Regulation of the Governor of DKI Jakarta concerning the Development of Jakarta MRT

The concept of sustainable financial structure is a principle that can guarantee the financial health of a business entity in its operation and management of a project including the implementation of Jakarta Mass Rapid Transit (“MRT Jakarta”)’s operations. In the acceleration of Jakarta MRT development project, the Governor of DKI Jakarta has issued Regulation of the Governor Number 53 of the Year 2017 on the Assignment of Public Limited Company (PT) MRT Jakarta for the Operation of Infrastructure and Facilities of Mass Rapid Transit (“Pergub 53/2017”).

Amendments to Sectoral Regulations concerning Infrastructure Delivery

Coordination of Amendments to Presidential Regulations on the onstruction and Development of Domestic Oil Refineries

B2.


Throughout the compilation of this report, KPPIP has conducted facilitation and coordination of discussion meeting on draft 53/2017 before its issuance. However, the final draft issued under Pergub 53/2017 has not governed the concept of sustainable financial structure and the obligations of the regional government to guarantee the sustainable financial structure of MRT Jakarta’s system.

Guarantee on the sustainable financial structure needs to be embodied in a product of law to guarantee the government’s commitment in managing MRT system.

Government Regulation on Giving Fiscal Incentives to Oil and GasDownstream Business Activities

Fiscal incentives are facilities that need to be implemented to increase the attractiveness of downstream oil and gas business for investors and business persons. Under Government Regulation Number 79 of the Year 2010 on Returnable Operating Costs and Imposition of Income Tax in Upstream Oil and Gas Business Entity (“PP 79/2010”), the Government has provided special fiscal incentives in upstream oil and gas business. On the other hand, the Government has not yet issued regulations on provision of fiscal incentives for downstream oil and gas business.

The provision of fiscal incentives for downstream oil and gas business has been governed in separate regulations on tax facility, among others are Regulation of the Government of the Republic of Indonesia Number 81 of the Year 2015 on Imports and/or Penyerahan Barang Kena Pajak Tertentu yang Bersifat Strategis yang Dibebaskan dari Pengenaan Pajak Pertambahan Nilai and Government Regulation Number 18 of the Year 2015 on Income Tax Facility for Investment in Certain Field of Business and/or in Certain Regions, as amended by Government Regulation Number 9 of the Year 2016.

Consequently, a Government Regulation specially governing provision of fiscal incentives in more detail is required. Throughout the compilation of this report, KPPIP has conducted debottlenecking and regulatory mapping on regulations related to fiscal incentives in the implementation of downstream oil and gas business activity. The issuance of Government Regulation on fisal incentives in downstream oil and gas business is the mandate of Article 31 D Law Number 36 of the Year 2008 on Income Tax.


Investment is one form of financing necessary in an infrastructure financing, however until now laws and regulations specifically govern investment in infrastructure are not yet available. In order to accommodate investment in infrastructure especially investment in the form of Collective Investment Contract, Indonesia Financial Services Authority (“OJK”) has drawn up Regulation of Indonesia Financial Services Authority on Infrastructure Investment Fund in the Form of Collective Investment Contract.

The conditions to be accommated in the Draft Regulations of OJK are as follows:

a. Guidelines for the issuance of infrastructure investment fund;b. Guidelines for the management of infrastructure investment fund;c. Guidelines for the contract and guidelines for document transparency in infrastructure

investment fund; d. Asset valuation in infrastructure investment fund; e. Registration statement for public offering and application for registration of infrastructure

investment fund; f. Reporting of infrastructure investment fund; g. Dissolution of infrastructure investment fund; and h. Provisions on sanctions.

In order to support the issuance of this Regulation of OJK, KPPIP provides support in the form of response and input to Draft Regulations of OJK. The Regulations of OJK are now at preparation stage and OJK has requested for response and input from other related parties.

Coordination of Issuance of OJK’s Regulations in Infrastructure Fund Investment in the Form of Collective Investment Contract

B3.

KPPIP’s Future Plans

CHAPTER VII


Outline Business Case (OBC) of Bitung International Hub Port (PHI)

KPPIP’s AchievementsA.

Until the end of July 2017, KPPIP has made progress as follows:

a. Determination of selection criteria and list of Priority Projects from the new list of National Strategic Projects specified in amendment to Presidential Regulation No.3 of the Year 2016.

b. 1 project Palapa Ring East Package reached financial close in March 2017.

c. 1 toll road project, which is Serang – Panimbang Toll Road, has completed tender and has signed Toll Road Concession (PPJT).

d. PPP funding scheme has been selected for West Semarang DWSS.

e. Has promoted settlement of some problems to accelerate priority projects.

f. Following-up policy related to acceleration of National Strategic Projects such as the the implementation of Government Regulation No. 13 of the Year 2017 on National Spatial Planning, formation of Indonesia Toll Road Authority (BPJT) as Public Service Agency (BLU), and implementation of availability payment by RGOE.


The following are KPPIP’s achievement targets in 2017 that have been approved by KPPIP’s Implementation Team:

1. Project achievement targets:

a. Revision to the list of 30 Priority Projects to maximum 35 projects based on the new List of PSN

b. 4 projects reached financial close c. 4 projects completed the tender d. Funding schemes for all priority projects have been determined and the construction is

prepared to commence by the end of 2018 e. Resolving 70% strategic project issues and priority projects as requested to KPPIP

2. Quality Improvement

a. Guidelines on funding scheme and Value for Money (VfM) have been ratified b. Implementing all guidelines on Standard Operating Procedure (SOP) of the office operation c. Conducting induction of all new staff d. Conducting evaluation of all staffe. Facilitating introduction of 6 Regional Governments and 2 neighbouring countries f. Producing at least three reports on KPPIP’s research and development (Potential topic:

Human Resources Strategy and alternative funding scheme)g. Issuing Infrastructure Outlook/Infrastructure Report Card h. Increasing the capacity of related stakeholders including the Ministries/Insitutions i. Implementation of IT dashboard used by all stakeholders j. Establishing intensive public communication such as preparing monthly infographics,

holding regular press conference, and preparing Semester Report

3. Targets on Improvement to Regulations

a. Identifying and ratifying issues in infrastructure sectors (such as water, electricity, energy, social infrastructure, and others) which have not been handled or are still awating decisions especially issues concerning private involvement including issues requiring new regulations (for example KPPIP emphasizing on outcome)

b. Following-up sectoral issues in electricity, port, airport, and railway. c. Preparing draft Law on Infrastructure/Government Regulation on PPP d. Preparing businesss plan with clear targets for the Work Team of a Sector

4. KPPIP’s targets for Institutional Strengthening

a. Promoting Senior Expert Staff of an Institutionb. Preparing KPPIP’s reinforcement plans required to reach the substainability of PSN and

Priority Projects until 2019 c. Formulating policy and stratefy for the development and institutional reinforcement of

KPPIP to make it more effective in providing infrastructure d. Preparing roadmap for development and reinforcement of KPPIPe. Facilitating consultation and dissemination in related institutions outside KPPIP

KPPIP’s Plans in 2017B.


Amendment to Government Regulation on Railway Operation National Long-Term Development Plan (RPJPN) 2005-2024 consists of four stages of National Medium-Term Development Plan (RPJMN).

KPPIP’s Activites in Human Capital and Capacity Development C.

Increasing the quantity of Human Capital

RPJMN 1(2005-2009)

Quality Human Capital with competence in science & technology

Improving Human capital quality

Quality Human Capital and Competitive

RPJMN 1

RPJMN 2

RPJMN 3

RPJMN 4

(2005-2009)

(2010-2014)

(2015-2019)

(2020-2025)

To re-organize and ddevelop Indonesia in every aspect aimed at creating safe, secure, just, democratic Indonesia with growing public wellfare.

To thoroughly consolidate development in every aspect by emphasizing achievement in economic competitiveness based on superiority of natural resources and quality human capital and improving competence in science & technology.

To re-consolidate Indonesia in every aspect by intensifying efforts to improve quality of cuman capital including to develop science and technology as well reinforce economic competitiveness.

To realize independent, modern, just, and prosperous Indonesian society by accelerating development in every aspect and by intensifying the development of firm economic structure based on competitive advantage in several regions supported by quality and competitive human capital.

RPJMN 1 RPJMN 2 RPJMN 3 RPJMN 4(2005-2009) (2010-2014) (2015-2019) (2020-2025)

MEA is imposedTo what extent is the quality and readiness of ourhuman capital compete with the

Need for human capital in construction: RPJM vs MEA

Image 7.1


We are now in the middle of National Medium-Term Development Plan (RPJMN) 3 (2015-2019). Guidance for the human capital in this era is “quality human capital with compentece in science and technology”, whereas for the next era or RPJMN 4 (2020-2024), it will be “quality and competitive human capital.” The guidance for the policy on human capital in both eras needs to be taken into account in planning for the provision of human capital. This guidance will be used to make the road map. RPJMN 3 emphasizes improved competence, whereas RPJMN 4 focuses on international recognition.

Num

ber o

f Pro

ject

sN

umbe

r of P

roje

cts

180

160

140

120

100

80

60

40

20

0

30

25

20

15

10

5

0

<2016

<2016

2024

2024

2023

2023

2022

2022

2021

2021

2020

2020

2019

2019

2018

2018

2017

2017

2016

2016

Pre-Construction Construction Period Operation Period

PROGRESS OF NATIONAL STRATEGIC PROJECTS

PROGRESS OF PRIORITY INFRASTRUCTURE PROJECTS

Pre-Construction Construction Period Operation Period

Progress of National Strategic Projects and Priority Infrastructure Projects in pre-, during-, and post-Construction

Graphic 7.1


Graphic 7.1 also shows progress in national strategic project and priority infrastructure project. It is important to add here that the status of 54 PSN needs to be investigated in terms of its construction period and operation period. In addition, the status of as many as 26 PSN is unknown. Some of the projects have been revised in the list of PSN issued in 2017.

Differentiating construction and operation period is important because the need for human capital varies. In construction period, deployment of technical personnel or skilled manpower especially in construction is quite rapid. On the other hand, in operation period the number is reduced and generally filled by manpower with more understanding of the substance according to the type of infrastructure in which human capital tends to have greater competence.

NOImproved- Competence of Human Capital Needed in Electricity 2016 2017 2018 2019

1 Plant 7,512 15,282 2,896 5,716

Operation 156 627 1,818 3,724

Maintenance 116 400 1,078 1,992

Development and Installation 7,240 14,255 - -

2 Transmission 767 992 609 563

Operation and Maintenance 767 992 609 563

3 Distribution (Substations) 2,730 3,864 2,256 2,034

Operation and Maintenance 2,730 3,864 2,256 2,034

4 Utilization Installation 9,494 9,207 9,477 8,528

Maintenance 9,494 9,207 9,477 8,528

Improved-Competence of Human Capital Needed in Geominerba

1 Smelter Operator - 5,643 342 171

2 Mining Operational Supervisor 544 480 760 760

Human Capital needed to Support Strategic Policy in EMR Sector

Table 7.1


Improved-Competence of Human Capital Needed in EBT

1 PLTS Operator - 1,827 - -

2 PLTMH Operator - 270 - -

Improved-Competence of Human Capital Needed in Geothermal

1 Geothermal Operator 145 116 377 435

2 Support Staff 180 144 468 540

Improved-Competence of Human Capital Needed in Oil and Gas

1Refinery Operator (Tuban Refinery and Balikpapan Refinery)

- - - 1.485

NOTES UNIT 2015 A 2016 A 2017 P 2018 P 2019 P

Land Registration area 955,061 1,222,697 5,000,000 7,000,000 9,000,000

ha 214,620 274,763 1,750,000 2,450,000 3,150,000

Number of BPN’s Surveyor Kadaster

people 2,000 2,000 2,000 2,000 2,000

Licensed Surveyor Kadaster (existing)

people - - 1,000 3,000 5,000

Need for Surveyor Kadaster with New Licenses

people - - 3,000* 2,000 2,000

Total Surveyor Kadaster people 2,000 2,000 5,000 7,000 9,000

Of the 3,000 people, 1,000 people have been reached (existing)

Notes:Ratio 1 Surveyor Kadaster = 1,000 area per yearRatio 1 area = 0.35 ha for year 2017-2019

Need for Surveyor Kadaster to Support Land Registration Process

Table 7.2

*)


N0 PROGRAM RATIO SIZE TIME SURVEYORASSITANT

RATIO OF ASSISTANT PER

SURVEYOR HUMAN CAPITAL QUALIFICATIONS

Min. Max. Min. Max.

1 35GW Electricity Program

PLN

Transmission

0,5 km/ team/ day

46,000Km long

3 years 103 300 300 2.9 2.9 103 teams (103surveyor, 300assistants)

Surveyor

Topography

PLN Tower Pad 5 pads/ team/ day

Size of pad = 20x20

1 year(300 days)

23 39 92 1.7 4.0 23 team (23surveyor, 39-92 assistants)

SurveyorTopography

Number of pad = 34,500pads

2 Zone needed for power plant (PLTU)

Topography measurement

1-1,5hectare/ survey team/day

10,000hectare

1 year(300 days)

34 99 122 2.9 3.6 34 tim (=34 surveyor, 99-122 asisten surveyor)

Cadastral Surveyor

Data processing 1 team of operator for every 3 survey teams

11 11 teams of data processors

Total 45 135 180 3.0 4.0 45 teams (45surveyor, 135-180 assistants)

3 Toll road corridors

Topography measurement

0,5 km/ team survey/day

2,600 km 3 years(900 days)

6 18 24 3.0 4.0 6 teams (=6surveyor, 18-24 assistants)

Surveyor Engineering

Data processing 1 team of operator for every 3 teams of surveyor

2 2 teams of data processors

Total 8 24 32 3.0 4.0 8 teams (= 8surveyor, 24-32assistants)

Need for Surveyor and Surveyor Assistant to support Strategic Policy in various Sectors

Table 7.3


N0 PROGRAM RATIO SIZE TIME SURVEYORASSITANT

RATIO OF ASSISTANT PER

SURVEYOR HUMAN CAPITAL QUALIFICATIONS

Min. Max. Min. Max.

4 Coal Mining

120 250 250 2.1 2.1

120 surveyor

250 assistants of surveyor

cadastral

5 Offshore Oil Rig

100

100 surveyor

Assistant Surveyor

Cadastral not needed

Problems and Engineering Solutions

Major Problems

Law No. 11 of the Year 2014 on Engineering was enacted on 22 March 2014. This Law instructs that several derivative regulations will have to be issued no later than three years after their promulgation. However, until 22 March 2017 neither of the Government Regulation, Presidential Regulation nor Presidential Decree had been issued.

1.2.3.4.5.

GOVERNMENT REGULATION

1. Scope of engineering 2. Engineering Profession Program3. Engineer Registration 4. Foreign Engineer 5. Engineering Coaching

Engineer Standard Competence with the MinisterSistem Engineer Registration Engineer Certification SystemPKB Standard/ CPDTesting System CompetenceMonitoring system for transfer of science and technology of foreign engineerMonitoring system of Engineering Practice

DUTIES OF INDONESIAN ENGINEERS COUNCIL

ORGANIZATION OF PII

Improvement to by-laws with the approval of the Minister’s ethic Honorary CouncilCompleteness of organization to carry out duties in Law

PRESIDENTIAL REGULATION

PRESIDENTIAL DECREE

Formation of Dewan Insinyur Indonesia (DII)

Structure of DII

Derivative regulation from Law No. 11/2014 that still have to be completed

Image 7.2


The absence of derivative regulations as mandated can have serious implications because certification and engineer’s work permit can be invalid. This can happen because the necessity of derivative regulation is governed in Engineer Act (UU Keinsinyuran).

• Every Engineer, technical engineer, applied technical engineer who has been certified is declared as integrated engineer and has adjusted it to this Law no later than 3 (three) years as from the promulgation of this Law (Article 52 Point b);

• Every Engineer who has conducted Engineering Practice by having work permit but not yet certified before the promulgation of this Law is declared as registered Engineer and must adjust it to this Law no later than 3 (three) years as from the promulgation of this Law (Article 52 Point c).

In addition to the 3 years target, in the Chapter of Transitional Provisions it has been instructed that there will be 1 year and 2 years target after this Law is promulgated as follows:

1. Within no later than 1 year (which means 2015), Indonesia Engineers Council (DII) will have to have been formed. In reality, until now DII has not yet been formed. This matter results in several functions of DII mandated in Engineer Act cannot be carried out;

2. Within 2 years at the latest (meaning 2016), the Implementing Regulation of this Law will have to have been determined. So far no Government Regulation (PP) has been issued. In order to fill this absence, Regulation of the Director General (Perdirjen) has been issued;

3. Within 2 years at the latest (meaning 2016), Articles of Association and PII’s By-laws (AD ART) have to conform to the provisions of this Law and obtain approval from the Minister of Research, Technology and Higher Education. The By-laws was determined in PII’s Extraordinary Congress in 2015 as PII’s By-laws and was also enacted by the Minister of Research, Technology and Higher Education in 2016.

Considering the absence of implementing regulations, there is a difference of opinion. For instance, Professional Engineer Program Coursre offered at Universities thinks that PII has to stop LSIP (Lokakarya Sertifikasi Insinyur Profesional)’s activities which have been running all these years even before the Engineer Act. However, PII thinks that as long as the regulation has not been issued, discontinuation of LSIP will create absence in certification program.

Government Regulations that have to be formed as derivative of Engineer Act are as follows:

1. Engineer Registration: a. Substance: Article 10 s/d Article 14 b. Procedure for administrative sanctions: Article 15 and Article 162. Foreign Engineer: a. Substance: Article 18, Article 19, and Article 20 b. Procedure for administrative sanctions: Article 213. Engineering Coaching: Article 45 s/d Article 484. Scope of Engineering technical discipline and scope of Engineering: Article 5 paragraph (1) and

paragraph (2)5. Engineer Profession Program: Article 7 and Article 8


Additionally, since 2016 PII’s Central Board (Pengurus Pusat) has issued Decision Letter (SK) on the formation of the Acceleration Team for Formulation of PP from derivative Engineer Act and has conducted both internal meeting and meeting with the Ministry of Research, Technology, and Higher Education several times. In support of this matter, legal consultant has been contracted.

Common Problems that Have to be Resolved

1. Ratio of technical engineering per 1 million population

This Engineer Act is a vital and strategic instrument to catch up with backwardness in engineering compared to ASEAN countries and the world. For instance, in terms of the number of technical engineers per one million population, Indonesia still ranks relatively low in comparison with other Asian countries: South Korea has 25,309 Technical Engineer, Vietnam 9,037, China 5,739, Thailand 4,121, Malaysia 3,333 and Indonesia 3,076. This number of Priority Infrastructure Projects and National Strategic Projects demands the unlimited availability of human capital. It is feared that the low ratio of technical engineer per one inhabitant is highly likely to be filled by workers for neighbouring or foreign countries.

2. Recognition of Washington Accord (WA)

This Engineer Act is a vital and strategic instrument to catch up with backwardness in engineering compared to ASEAN countries and the world. For instance, in terms of the number of technical engineers per one million population, Indonesia still ranks relatively low in comparison with other Asian countries: South Korea has 25,309 Technical Engineer, Vietnam 9,037, China 5,739, Thailand 4,121, Malaysia 3,333 dan Indonesia 3,076. This number of Priority Infrastructure Project and National Strategic Projects demands the unlimited availability human capital. It is feared that the low ratio of technical engineer per one inhabitant is highly likely to be filled by workers for neighbouring or foreign countries.

3. Recognition of Development/Formation of Competence in Industry

Several industries in Indonesia have run professional development programs (formation of competence) for technical engineers newly-recruited for a certain period of time, and even after finishing the profession development program, the technical engineer will still have to go through “professional road map” as long as the respective engineer works in the company/industry where they are currently working. This matter needs government’s attention in terms of engineer certification process. Several industries providing profession development program such as Pertamina (BPST), Badak LNG, Yokogawa Indonesia, Pupuk Indonesia, and Unilever.

4. Engineer Profession Program (PPI)

In connection with Engineer Act (UU Keinsiyuran) No. 11 of the Year 2014, the government has appointed 40 universities to run Engineer Profession Program (PPI) for engineering profession development For Technical Engineers and conduct engineer certification. Engineer Profession Program (PPI) can be conducted in two ways, regular program or Recognition of Prior Learning (RPL).


5. Certification of PII and Construction Service Development Board (LPJK)

LPJK is an institution under the Ministry of PWPH issuing Qualified Certifications (SKA) for engineers or technical engineers and Sertifikat Ketrampilan Kerja (SKT) for engineers at undergraduate degree and applied graduates. LPJK was formed right after the issuance of Law on Indonesian Construction Company (UU Jasa Konstruksi) enacted in 1999. However, since the establishment of BNSP in 2003, the authority of the Ministry of PWPH in this case LPJK is limited to expertise/skill certification related to only infrastructure project. PII is one of the professional associations recognized/acknowledged by LPJK. The academic disciplines recognized by LPJK are civil, architectural, mechanical (thermal), and electrical engineering (instrumentation and control). In relation to the procurement process for project tender (experts are entitled to take part in the tender), institution/company certification is also available. With PII’s individual certification/professional engineers, corporate certification by LPJK is determined by the number of Novice Engineer (IPP), Para-Professional Engineer (IPM) and Professional Engineer (IPU) in a company.

6. SKKNI of Every Board of Chapter

Each Board of Chapter (BK) within the Institute of Indonesian Engineers (PII) develops Indonesia National Standards for Job Competency for Engineers (SKKNI Insinyur) which will serve as the reference for PPI operation, Recognition of Learning/Prior Learning (RPL) Program, and as the basis for the running of competency test and Engineer Profession Registration Program (Registrasi Profesi Insinyur in Indonesia). Draft SKKNI Insinyur is drawn up based on the competence believed to represent each respective Board of Chapter (BK) and receives input from stakeholders in each respective BK. Draft SKKNI Insinyur then needs to be shown to BNSP and LPJK (as long as it still performs its function). Inputs from the stakeholders will be used to revise parts considered necessary to be revised before it is decided by the Government as the state’s official documents.

7. Indonesian Engineers Council (Dewan Insinyur Indonesia)

Under the Law No. 11 of the Year 2014 the Indonesian Engineers Council is an institution comprising of stakeholders in the operation of Engineering having the authority to formulate policy on Engineering operation and its implementation monitoring. Engineers Council has mandate to formulate policy, develop international engineering cooperation, and monitor transfer of technology by foregin engineers.

Formulation of this policy includes engineering registration system, standard Engineers Profession Program, standard Continuing Professional Development (Pengembangan Keprofesian Berkelanjutan), monitoring of the implementation of Engineering Practice by PII, Competency Test system and Engineer competency standard. This matter asserts that PII’s duties should be determined by Engineers Council, so it plays an important role and considering the mandate given by Engineer Act (UU Keinsinyuran), the Indonesian Engineers Council wil have to be formed no later than one year after the Law is promulgated.

Engineers Council mandated by the Law was declined by the Ministry of Administrative and Bureaucratic Reform. PII proposed draft Government Regulation containing proposal for a body to replace functions of Engineers Council prior to its formation. The draft is being drawn up by the Legal Bureau of the Ministry of Research, Technology, and Higher Educaction.


PEForeign National

FOREIGN ENGINEER

Ir Competency System

recognized by APEC/ASEAN

Foreign Engineer can only conduct Engineering activities in Indonesia according to the need of national development

National Development is

needed

Conduct Transfer technology

Renewal of WORK PERMIT

WORK PERMIT

GOVERNMENT

SURAT TANDA REGISTRASI INSINYUR (STRI)

8. Foreign Engineer

Foreign Engineer may conduct Engineering activities in Indonesia according to the need of national development. Foreign Engineers who wish to work as Practitioner Engineer (PE) in Indonesia must be registered in their home countries. This matter is contained in Article 18 Point 3 and 4, namely:

• Article 18 Point (3): In order to obtain written work permit as referred to in paragraph (2), a foreign engineer must have Surat Tanda Registrasi Insinyur from PII based on surat tanda registrasi or Engineer competence certificate under the law of the home country.

• Article 18 Point (4): In the event that the Foregin Engineer does not have surat tanda registrasi or Engineer competence certificate under the law of the home country as referred to in paragraph (3), the Foregin Engineer has to meet the requirements as referred to in Article 11.

Provisions concerning Foregin Engineer as to be regulated in a Government Regulation as a derivative of Engineer Act (UU Keinsinyuran).

PII’s proposal to Presidential Regulation and Presidential Decision has been submitted and discussed since 2015, yet agreement in internal PII has not been reached which makes it difficult for the Government to follow up.

On the other hand, the Government has launched reduction/dissolution of Non-Structural Institutions financed by the State Budget resulting in the delayed formation of the Indonesian Engineers Council until an indefinite future.

Provisions concerning Foreign Engineeer

Image 7.3


Views/Attitude of Parties to Engineering

The Ministry of Research, Technology, and Higher EducactionThe Ministry of Research, Technology, and Higher Educaction views that the Bachelor Program (S1) awards Technical Engineering, the Institute of Indonesian Engineers Study Program (PSPPI) awards Engineer as the academic title. The requirements to take PSPPI are:

1. Bachelor degree in engineering or bachelor degree in applied engineering, both domestic and overseas universities that have been adjusted to Indonesian education system; or

2. Bachelor degree in engineering education or bachelor degree in science which has been adjusted with bachelor degree in engineering or bachelor degree in applied engineering through adjustment program.

ST

Non ST

Ir. IPP IPM IPU

PS-S1

PS-S1Non ST

PSPPI PII

Adjustment

WorkExperience

Professional competency testing will be based on work experience.

Views of the Ministry of Research, Technology, and Higher Educaction concerning professional certification

Image 7.4

Engineer Proffession Program (PSPPI)Engineer Profession Program (PSPPI) holds the same view as the Ministry of Research, Technology, and Higher Educaction, emphasizing that competence certificate of Professional Engineer (IP) must be awarded to an individual holding Engineer as academic title.


Views of the Institute of Indonesian Engineers Study Program concerning professional certification

Image 7.5

ST

ST

Ir. IPP IPM IPU

PS-S1Non ST

Adjustment

WorkExperience

PS-S1 PSPPI PII

The Insitute of Indonesian Engineers (PII)In order to administer Professional Engineer certification, the Institute of Indonesian Engineers (PII) always runs LSIP (Lokakarya Sertifikasi Insinyur Profesional). This has been run prior to the issuance of UU No. 11 of the Year 2014 on Engineering. IPP, IPM, and IPU certificated based on competency score. The minimum score given for IPP is 600, 3.000 for IPM, and 6.000 for IPU. Considering the Engineer title is now run again through the issuance of Engineer Act, prior to the issuance of Professional Engineer certification can be given to Bachelor of Engineering and any individual who has been working in the field of engineering.

Views on PII concerning Profession Certification before Law No. 11 Year 2014

Image 7

ST

Non ST

LSIP

IPP

IPM

IPU

PS-S1

Non ST

PII PII - Certification

AdjustmentWorkExperience

WorkExperience

LSIP : Lokakarya Sertifikasi Insinyur Profesional

Prior to UU No. 11/2014


Before the Engineer Act (UU Keinsinyuran) was enforced, PII always run LSIP for certification process of Professional Engineer (IP). The requirements to take LSIP are:

1. Bachelor degree in engineering or bachelor degree in applied engineering for graduates from local universities and overseas universities that have been adjusted; or

2. A bacheloer degree in engineering education or bachelor degree in science considered equal to bachelor degree in engineering or bachelor degree in applied engineering that has been adjusted.

The rationale is whoever meets the requirements provided that proof of engineering practice can be produced, the said individual is entitled to receive Professional Engineer certificate.

After the issuance of Engineer Act (UU Keinsinyuran), the mindset remains with additional intake during LSIP to obtain the title as an Engineer. However, this mindset creates potential conflicts with PSPPI who wants the PE participants to be only for those holding an Engineer’s degree, not anybody who have achieved competence score based on the Professioanl Engineer Aplication Form (FAIP) filled in.

ST

Non ST

LSIP

IPP

IPMIPU

PS-S1

Non ST

PII PII-Certification

Adjustment

WorkExperience

WorkExperience

Prior to Law No. 11/2014

Ir.

PSPPI

Adjustment

Views of PII concerning Professional Certification after Law No. 11/2014Image 7.6


Views of the Ministry of PWPH concerning competence CertificationImage 7.7

The Directorate General of Bina Konstruksi, the Ministry of PWPH

S.T Ir.

SKA

PT-PSPPI

LPJK* and/or ProfessionalAssociation via LSP

*Under Law No. 2 Year 2017 on Construction Services, LPJK is eliminated

Ahli Muda Ahli Madya Ahli UtamaSKA SKA

Under the Law No.18 of the Year 1999 on Construction Services, the Ministry of PWPH forms LPJK. However, under Law No. 2 of the Year 2017 on Construction Services, LPJK no longer exists considering the institution having right to run professional certification activity is BNSP. LPJK, in the end, becomes an institution running the administrative affairs of certification activity at the Ministry of PWPH. LPJK’s primary duty is to synchronize certification mechanism in any profession, so there will always be two types, namely SKA dan SKT.

Other Ministries acknowledge and use certifications issued by LPJK to run procurement of construction services in their internal organization. In addition, SKA and SKT are accepted at other ministries because every development of government building is entitiled to be assisted and supervised by Technical Manager from the Directorate General of Cipta Karya, the Ministry of PWPH. Having eliminated LPJK does not necessarily mean that certification activity will stop/discontinue.

The management of certification administration for individuals can be handed over to BNSP. However, the institution playing a role in competence testing should be professional association, yet especially for business entity that is still under review whether or not the Directorate General of Bina Konstruksi, the Ministry of PWPH will issue new regulations concerning this matter.


BPSN’s views on Certification conducted by PII

Image 7.8

Image 7.8 shows that conducting competency test for holders of engineer’s degree requires LSP that has obtained license from BNSP. This license is the requirements/conditions for to get authority as certifier in Indonesia. LSP can be utilized not only by Board of Chapter (Badan Kejuruan/BK), which is part of the PII, but also by Himpunan Keahlian Keinsinyuran (HKK) which is a professional association in one field of engineering discipline.

National Agency for Professional Certification (BNSP)BNSP’s focus is on the formation of LSP (Lembaga Sertifikasi Profesi) for every competency testing activity and issuance of certification for individuals. Only one LSP can be formed for PII. This is because LSP is a business entity that can be in the form of a Limited Liability Company or a Foundation. The LSP owned by PII is Type 3 meaning that it is entitled to conduct certification activity for public.

Insinyur

PSPPI

PII forms LSP

PII accredits HKK

PII

LSP

COMPETENCY TEST

Engineer Competency Certification

Follow-UpsThe delayed issuance of derivative regulation from Engineer Act can create serious problems. The following are the follow-ups planned by KPPIP:

1. Consultation with KPPIP’s Team of Legal Consultants concerning legal implications due to the late issuance of the derivative regulation;

2. Identification of progress in formulation of regulations. A proposal has been pur forward by PII concerning Presidential Regulation and Presidential Decision and discussion with the Ministry of Research, Technology, and Higher Educaction. Understanding and approval is required between the Government represented by the Ministry of Research, Technology, and Higher Education, and the Institute of Indonesian Engineers Study Program (PPI) and PII. In addition, it is also important to involve the technical Ministries/Government Agencies such as the Ministry of PWPWH, the Ministry of EMR, the Ministry of Industrial Affairs and the Ministry of Transportation as well as BNSP;


ActivityIn order to support the implementation of Priority Project and National Strategic, KPPIP is mandated to conduct capacity development of the Implementing Agency (PJP) and the stakeholders in other infrastructure sectors.

In March 2017, KPPIP recruited Experts (TA) in Capacity Development to carry out the mandate. Experts (TA) in Capacity Development are currently conducting a number of activities adjusted to KAK as follows:

1. Preparation for capacity development as a follow-up to MoU on Capacity Development by between Three Parties, namely KPPIP, PT PII and PT SMI and two activities being discussed are:

a. Introduction of legal basis and procedure for the implementation of acceleration in priority project and national strategy

Indonesia as one developing country, infrastructure development is still one of the supporting aspect in economic growth to realize public welfare. Adequate infrastructure is expected to activate sector, public consumption, and production activity. In order to create a sustainable infrastructure development, the Government mandated the relevant government agencies to accelerate the implementation of National Strategic Project (PSN).

The government institutions are specified and given duties and authority as governed by Presidential Instruction No. 1 of the Year 2016 on Acceleration in the Implementation of National Strategic Project. The President has also issued Presidential Regulation No. 3 of the Year 2016 on Acceleration in the Implementation of National Strategic Project containing facilities that can be provided to accelerate the implementation of PSN as well as the attached list of PSN.

3. Formation and operation of consultation forum with keynote speaker concerning engineering;4. Formulation of transitional steps prior to derivative regulation; In case the formulation of derivative regulation still needs a relatively long time, transitional

steps need to be taken before the issuance of the regulation. This transitional step can be made legal in the form of Ministerial Regulation;

5. Acceleration in the formulation of derivative regulation with KPPIP’s Team of Legal Consultants to conduct this activity;

6. Introduction of derivative regulation after its issuance to the stakeholders.

Capacity Development Activity as a Support to Priority Project Implementation and National Strategic


In addition, business entity’s procurement process under Public-Private Partnership (PPP) scheme, Presidential Regulation No. 38 of the Year 2015 on Public-Provate Partnership in Infrastructure Delivery has been issued along with its implementing including:

i Regulation of the Minister of National Development Planning/Head of National Developemnt and Planning Agency No. 4 of the Year 2015 on Procedure for the Implementation of Public-Private Partnership;

ii Regulation of the Head of Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah No. 19 of the Year 2015 on Procedure for Procurement of Public-Private Partnership in Infrastructure Delivery; and

iii Regulation of the Minister of Finance No. 260/PMK.08/2016 on Procedure for Availability Payment in Public-Private Partnership in Infrastructure Delivery;

iv Regulation of the Minister of Home Affairs No. 96 of the Year 2016 on Availability Payment in Regional Government and Business Entity Partnership in Infrastructure Delivery in the Region.

In the event that PSN needs to procure land, Law No. 2 of the Year 2012 on Land Procurement in Development for Public Interest and Presidential Regulation No. 71 of the Year 2012 on the Operation of Land Procurement in the Development for Public Interest. Further, technical regulations on land procurement through Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of National Land Agency No. 5 of the Year 2012 as amended by the Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of National Land Agency No. 6 of the Year 2015 on Technical Guidelines for Land Procurement.

Considering the above matters, the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) takes the initiative to conduct a workshop on capacity building for Law Enforcement Officers (APH) to explain in more detail matters related to special mandate given to government agencies for the acceleration of National Strategic Project (PSN). Workshop on the capacity development is expected to provide in-depth understanding for APH of the duties, functions and authorities of government institutions related to National Strategic Projects (PSN) for the implementation of PSN. On the other hand, the aims and purposes of this dissemination activity are to discuss with the APH on the authority/special mandate of the government institutions in order to support the acceleration of PSN. The workshop is aimed at:

i Understanding mandate and special authority for the Government institutions in compliance with the prevailing laws and regulations in order to support the acceleration of PSN;

ii Understanding of what steps to be taken by government agencies in order to support the acceleration of PSN including obtaining input;

iii Knowing the duties, functions and authority of Government specified in Instruksi Presiden No. 1 of 2016.


The results of the workshop are:i To provide a better understanding to APH of laws and regulations concerning

acceleration in the implementation of;ii To provide a better understanding and practical example of the implementation

of PSN to the APH concerning the duties, functions and authority of Government institutions specified in Instruksi Presiden No. 1 of the Year 2016.

The implementation plan for introduction/workshop is awaiting revision to Presidential Regulation No. 3 of the Year 2016 considering the change in substance which will affect the topic to be delivered. The implementation plan will be conducted in June 2017 and/or after the issuance of revision to Presidential Regulation No. 3 Year 2016.

b. Infrastructure Breakfast InitiativeInfrastructure Breakfast Initiative is an initiative to present discussion on the theme of infrastructure in a talk show format. The scope of discussion is priority project and national strategic project on the sub-theme:

i Introduction to a method/way applied by other countries and can be adopted in Indonesia in supporting acceleration of national strategic and priority infrastructure delivery

ii Learning from an acceleration of preparation/transaction process of priority and national strategic projects

iii The growing agenda in connection with a certain policy having the impact on priority and national strategic project delivery and from the agenda, actions to follow up will serve as recommendations for the stakeholders so that the agenda will not be a hurdle in realizing the agenda.

The keynote speakers and participants present are stakeholders in Infrasructure, especially those related to priority and national strategic project. The activity is expected to be realized in the second semester this year.

c. Exploring capacity development for the Ministry of Transportation (classical training), in this case with Cooperation Bureau which will be the knot of PPP in the Ministry of Transportation

This plan is still being explored by KPPIP and Cooperation Bureau of the Ministry of Transportation to identify the need for capacity development in implementing PPP scheme. Identification of capacity development will be coordinated with PT PII and PT SMI which will help draw up reference based on the need for capacity development for state employees (including GCA) at the Ministry of Transportation.

This activity is expected to be conducted once in the second semester of 2017 aimed at state employees at the Ministry of Transportation, especially at Cooperation Bureau and Directorate General which have duties/responsibilities either directly or indirectly in priority and national strategic project.


2. Coordination with KPPIP-Support Facility (KPPIP-SF) in Jakarta Sewerage System (JSS) Priority Project which focuses on capacity development of GCA anddevelopment plan for human capital when the project is in operation.

A more intensive discussion with JICA is still needed concerning planning on human capital as well as capacity development given by JICA to the stakeholders of this JSS project.

KPPIP is coordinating that at the end of 2017 a comprehensive mapping of human capital development and maintenance of JSS infrastructure will be available.

3. Preparation for Webinar production in 2017 and reproduction of webinar in 2016 For the purpose of sharing knowledge possessed by KPPIP concerning preparation

process and debottlenecking of priority and national strategic projects, KPPIP will provide a webinar (online seminar). Discussion on webinar topic is being discussed and production of webinar will start. This webinar is aimed at:

a. Providing material that can easily be accessed and not limited to the Implementing Agency of priority and national strategic project;

b. Ensuring that all members of KPPIP have the capacity and good quality in carrying out KPPIP’s mandates.

The proposed concept of webinar includes:

a. Asynchronous learning is teaching technique focusing on participants where the online source of learning

is used to enable sharing of information among the people within the network. In asynchronous learning, information sharing is not limited to place or time. Asynchronous learning is facilitated by the media such as email, online discussion board, mailing list, blog or Wikipedia.

b. Recording face-to-face Learning with content of webinar In this learning is a face-to-face learning session recorded on purpose. In its production,

the face-to-face training session will use a camera equipped with microphone for a clear recording.


Understanding of the webinar content can be achieved by implementing the structure of learning content. The content is structured as follows:

a. Introduction Description on opening video is the initial layout first seen by the participants when they access

it. This can be translated in the form of opening animation (abstraction of the whole content) and title introduction and thumbnail layout of the video;

b. Overview of the learning Explanation of the general content of learning and aim of learning is very important to be

understood by the participants when they access the learning content. Copywriting of the description video in the portal can be done and delivered directly to the trainer at the beginning of the training

c. Topic of learning d. The knowledge wished to be shared in the learning process is elaborated in the learning

material in the form of link led to reading material and delivered by the trainer. In order to improve participants’ participation in the learning process, assessment on them can be made. The content of the webinar that does not need assessment can be done by holding a quiz as part of the video followed by the answers.

e. Closing The content is ended by elaborating on the summary of knowledge transferred during the

learning process.

As for the 2016 webinar, it can now be accessed via Youtube in the followinglink: https://www.youtube.com/channel/UCRR0hXFIyVO4HjewTylyUGg

www.kppip.go.id

[email protected]

facebook.com/kppip

@kppip_ri

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